FCA Pens Warning to FTX on Violation of Set Rules

The UK Financial Conduct Authority (FCA) published a warning on Friday directed at crypto exchange FTX, alleging that the exchange was providing financial services without authorization from the agency.

The regulatory watchdog revealed that giant cryptocurrency exchange FTX was not authorized in the UK but is offering services to resident investors. According to dictates, companies facilitating specific cryptocurrency activities in the UK must go by the rules outlined in the amended “Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations,” and register with the FCA.

FCA Warns Investors About Absence of Coverage on FTX Investment

The financial watchdog warned investors: “You will not have access to the Financial Ombudsman Service or be protected by the Financial Services Compensation Scheme (FSCS), so you are unlikely to get your money back if things go wrong,” adding:

“Almost all firms and individuals offering, promoting, or selling financial services or products in the UK have to be authorized or registered by us.”

This comes as FTX ramp up efforts to expand its base into Europe and other parts of the world. The crypto firm created FTX Europe in March 2022, noting that it had received approval from the Cyprus Securities and Exchange Commission (CySEC).

Also, in May, the UK government rolled out its plans to support cryptocurrency adoption and reassured the public of its commitment to regulate Stablecoins.

Former Chancellor of the Exchequer Rishi Sunak noted earlier this year: “It’s my ambition to make the UK a global hub for crypto asset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate, and scale up in this country.” Speaking in a similar tone, Sunak’s former colleague, Glen, noted: “We want this country to be a global hub — the very best place in the world to start and scale crypto-companies.”

That said, the laid-out crypto plans by the government may change with the emergence of a new Prime Minister, Liz Truss.