The Financial Conduct Authority (FCA) of the United Kingdom has issued a consumer advisory against the cryptocurrency exchange FTX for operating inside its jurisdiction without authorization. Since August 2020, the FCA has been developing a list of digital asset firms that have complied with the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations (Information on the Payer) of 2017. Among the 37 companies now on the list are cryptocurrency exchanges Gemini, Kraken, Galaxy Digital, and eToro, as well as the challenger bank Revolut, which has interim registration status.
The FCA stated in a statement that "virtually all firms and persons offering, marketing, or selling financial services or products in the United Kingdom must be authorised or registered by us" and that FTX "is not authorised by us and is targeting individuals in the United Kingdom."
However, it remains to be seen if FTX will face any immediate repercussions as a result of the warning or if they will have the opportunity to discuss their case with the regulator.
Notably, the FCA regulates more than 50,000 financial institutions in the United Kingdom to verify that they comply with regulations. It mandates that crypto-related businesses register and comply with anti-money laundering legislation, including the implementation of consumer KYC limitations.
The warning against Sam Bankman-multibillion-dollar Friend's juggernaut is another example of the FCA sounding the alarm on the digital assets industry. Since the surge in digital assets in 2021, the regulator has been keeping a tight check on the sector, advising companies against misleading marketing tactics and prohibiting all Bitcoin ATMs (via BBC) in the country.
It was also one of several agencies that intervened against Binance for its regulatory methods last year, posting a similar warning regarding FTX to indicate that the world's largest cryptocurrency exchange constituted "a major risk" to UK consumers.
In response to the regulatory scrutiny, Binance introduced required KYC limitations and reduced its maximum leverage offering from 100x to 20x, among other significant modifications.
