The Financial Conduct Authority (FCA), the UK’s top financial regulator, has issued a warning to Bahamas-based crypto exchange FTX, saying it is operating without authorization. The company has joined a growing list of unregistered crypto-related businesses that continue to trump those registered with the FCA. The regulator stated:
“Almost all firms and individuals offering, promoting or selling financial services or products in the UK must be licensed or registered by us.”
FTX must comply with Money Laundering, Terrorist Financing and Transfer of Funds Regulations
The U.K.’s Financial Conduct Authority (FCA) published a warning on its website Friday about crypto-exchange FTX. The regulator detailed:
‘We believe this company may be providing financial services or products in the UK without our permission.
Addressing potential customers, the FCA notes that they will not be able to get their money back or seek protection under the Financial Services Compensation Scheme “if things go wrong.”
At the end of August, the list of crypto firms registered with the FCA included 37 entities, with Crypto.com becoming the latest to join. Other firms that made it through the registration process in 2022 to comply with approved money laundering regulations were eToro UK, DRW Global Markets LTD, Zodia Markets (UK) Limited, Uphold Europe Limited, Rubicon Digital UK Limited and Wintermute Trading LTD.
The FCA explained that FTX is not licensed but is targeting investors in the UK. Firms that conduct specific crypto-asset activities in the UK must comply with the amended “Money Laundering, Terrorist Financing and Transfer of Funds Regulations” and register with the FCA.
“You will not have access to the Financial Ombudsman Service and will not be protected by the Financial Services Compensation Scheme (FSCS), so it is unlikely you will get your money back if things go wrong,” the financial regulator warned, elaborating:
The UK regulator’s announcement coincides with FTX Europe receiving the Cypriot investment firm license from the country’s Securities and Exchange Commission (CySEC).
Sam Bankman-Fried, CEO and founder of FTX said:
“Obtaining this license in the European Union is an important step in achieving our goal of becoming one of the most regulated exchanges in the world.”
“We continue to work with CySEC and regulators around the world to lead the digital asset industry when it comes to meeting the financial standards expected of traditional financial institutions.”
Given this announcement from the CEO, the exchange platform will no doubt be working with the UK regulator. Let’s wait and see….