Coinspeaker
UK FCA Flags Huobi (HTX), KuCoin, and 140 Companies as Unauthorized
On October 8, the UK’s Financial Conduct Authority (FCA) included 143 new entities in its warning list of unauthorized firms. Notably, this list features major crypto companies like Huobi/HTX and KuCoin, both significant players in the crypto industry. The warning list essentially functions as a public notice intended to caution users against engaging with these entities.
The Financial Conduct Authority of the United Kingdom is tasked with controlling and regulating financial services in the country, encompassing those related to cryptocurrencies and crypto assets. The commission plays a pivotal role in ensuring that firms operating within its jurisdiction adhere to the necessary regulations, aimed at safeguarding customers and upholding the integrity of the financial system.
The warning list serves as a clear message from the FCA, indicating that the included companies lack authorization or have failed to meet regulatory requirements for operating within the United Kingdom. The regulator also intends to take robust enforcement actions against those unlawfully promoting their services to UK customers. These actions may encompass website and social media account removals, as well as pursuing criminal charges, among other measures.
“Our Warning List shows the firms that we’re concerned are working without our permission. We add firms to this list as soon as possible. But if a firm isn’t on the list, it may still be unauthorised or be a scam. Unauthorised firms often change their names, and we may not be aware of it yet,” wrote the FCA.
For a firm to engage in crypto asset activities in the UK, it must either be registered with the FCA or possess a temporary license for legal operation. This framework is designed to protect citizens and prevent malicious entities from exploiting crypto for illicit activities and fraud. Consequently, these companies must adhere to anti-money laundering (AML) and know-your-customer (KYC) rules. The FCA warned:
“Make sure you only deal with authorised firms. If you deal with an unauthorised firm, you won’t be covered by the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong.”
The Impact of UK FCA’s Regulatory Actions on Crypto Businesses
The FCA’s endeavors to regulate the crypto industry have led to a relatively low number of registered crypto companies. Presently, only 42 companies are registered out of 291 applications received since 2020, showing the regulator’s selective approach to granting registrations. All of these actions underscore the regulator’s unwavering commitment to preserving the integrity of the financial system and safeguarding consumers in the volatile and continually evolving crypto industry.
These regulations have also posed challenges for some companies operating in the country. Consequently, companies like Bybit have planned to suspend their services in the UK, while PayPal temporarily halted crypto transactions until it can ensure full compliance with the FCA’s requirements.
UK FCA Flags Huobi (HTX), KuCoin, and 140 Companies as Unauthorized
