The Financial Conduct Authority (FCA), the United Kingdom’s chief financial regulator, has warned the Bahama-based crypto exchange FTX, alleging that it operates without authorization.
The company has joined a growing list of unregistered cryptocurrency-related businesses that outnumber those registered with the FCA.
The FCA stance
According to a September 16 warning note, the company “may be providing financial services or products in the UK without authorization.” In its letter to prospective customers, the FCA states that they will be unable to recover their money or seek the protection of the Financial Services Compensation Scheme “if things go wrong.”
By August, the list of crypto companies registered with the FCA had grown to 37, with Crypto.com being the most recent addition. eToro UK, DRW Global Markets LTD, Zodia Markets (UK) Limited, Uphold Europe Limited, Rubicon Digital UK Limited, and Wintermute Trading LTD were among the other firms that completed the registration process in 2022 to obtain Money Laundering Regulations approval.
In January 2020, the FCA implemented new cryptocurrency-focused regulations to allow it to supervise businesses operating in the space and enforce AML and counter-terrorism financing regulations. As an FCA spokesperson explained to Cointelegraph in August:
“Successful registration depends upon a firm meeting the minimum standards we expect to prevent money laundering and terrorist financing, and we have seen too many financial crime red flags missed by the crypto asset businesses seeking registration.”
Although it is unclear what the immediate consequences for unregistered entities will be, the FCA is far from a vegetarian regarding enforcement. On September 13, ePayments, one of the largest electronic payment providers in the United Kingdom, closed its doors three years after receiving a similar order from the FCA due to alleged weaknesses in its “financial crime controls.”
It is not the first time FTX has drawn regulators’ attention.
On August 19, the Federal Deposit Insurance Corporation (FDIC) issued a cease and desist letter to the company, alleging that it had misled the public about the FDIC’s insurance of certain cryptocurrency-related products.
