UK Financial Watchdog Issues Warning Against Crypto Exchange FTX

UK Financial Watchdog Issues Warning Against Crypto Exchange FTX
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The UK financial regulator has warned consumers not to deal with FTX, the cryptocurrency exchange run by billionaire Sam Bankman-Fried, in the latest showdown between British authorities and offshore digital asset firms.

The Financial Conduct Authority said the Bahamas-based exchange appeared to be offering products and services in the UK without its authorization, according to a statement on the regulator’s website.

“This company is not licensed by us and is targeting individuals in the UK,” the statement said.

The move against FTX, one of the largest digital asset exchanges, comes after an uphill battle between the FCA and Binance as the UK steps up efforts to control the often unregulated world of CRYPTOCURRENCIES.

The FCA weighed in against Binance last year, saying its “high-risk and complex financial products” posed “a significant risk to consumers” and that the world’s largest cryptocurrency exchange had “failed” to respond to some of its claims. basic queries, which made it impossible. to oversee the expanding group.

Binance, one of FTX’s main rivals, has pledged to fully comply with regulation and re-apply for UK supervision.

An FTX representative said he believed the regulator intended to warn consumers about a scam spokesperson posing as the exchange because some of the phone numbers the regulator listed had been reported as being linked to scams.

However, the spokesperson acknowledged that the website identified by the FCA: is the actual website of the company. “We are investigating and communicating with regulators,” FTX said. The FCA said in response: “It is important that we issue warnings as quickly as possible and [we] will post updates if more information comes to light.”

Providers of crypto exchanges and wallets are required to register with the FCA for anti-money laundering supervision if their digital asset activity “is carried on as a business in the UK,” according to FCA guidance.

The FCA and other financial regulators around the world have risen to the challenge of protecting consumers and imposing standards in crypto markets, where many of the largest groups are based in offshore jurisdictions. Both FTX and Cayman Islands-registered Binance have established US subsidiaries to appease US authorities, but offer services in other countries from their international base.

FTX’s European division announced this month that it had been granted an investment firm license by the Cyprus financial regulator, as the crypto firm strives to expand across the continent. Bankman-Fried, CEO of FTX, said at the time: “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.”

The FCA said that UK clients trading with FTX would not have access to UK consumer protections such as the Financial Ombudsman or the Financial Services Compensation Scheme, and would be “unlikely to obtain [their] money back if things go wrong.”

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