UK’s Financial Conduct Authority (FCA) Adds Numerous Crypto Exchanges to its Non-Authorized Firms Warning List
In an effort to regulate the cryptocurrency space and safeguard investors, the Financial Conduct Authority (FCA) of the United Kingdom took action on October 8 by adding 143 new entities to its warning list of non-authorized firms that consumers are advised to steer clear of. The list included some major cryptocurrency exchanges like Huobi-owned HTX and KuCoin. While the FCA’s warning list offers minimal details, the overarching message is clear: “You should avoid dealing with this firm.”
Regulation in the UK: A Key Criterion
In the UK, companies that wish to engage in “crypto asset activities” are required to either be registered with the FCA or have temporary authorization to operate. Non-compliance can have serious consequences, as Jayson Probin, the FCA’s crypto financial promotions lead, warned in a private blog on LinkedIn back in July.
The FCA has been actively taking action against those who illegally promote financial services to UK consumers. Such actions range from placing firms on the warning list to requesting takedowns of websites, social media accounts, and applications that violate the regulations. In some cases, enforcement measures could be implemented, including legal action.
High Bar for Regulatory Approval
As of August, the FCA had approved a mere 13% of the 291 applications it had received since 2020 for crypto asset registration. This shows that the regulatory bar in the UK is set high to ensure compliance with standards and regulations. Presently, the FCA’s list of registered crypto asset providers includes just 42 entities, which have successfully met the necessary criteria. Notable names on this list include Bitstamp, Revolut, and Gemini.
Companies Adjusting to Regulatory Changes
The UK’s stringent regulatory environment has led to some crypto businesses temporarily halting their services. For example, PayPal decided to suspend crypto transactions for its UK customers until it could ensure compliance with the FCA’s requirements. Similarly, Bybit, a cryptocurrency exchange headquartered in Dubai, suspended its services in the UK at the end of September due to the evolving regulatory landscape.
Ensuring Investor Protection
The FCA’s actions, while appearing stringent, are aimed at protecting investors and ensuring the integrity of the financial system in the cryptocurrency space. As the regulatory landscape continues to evolve, exchanges and service providers must adapt to meet the regulatory requirements to remain in operation in the UK. These actions reflect the UK’s commitment to maintaining a secure and well-regulated financial environment for cryptocurrency investors.