On Sunday, October 8, the UK’s financial markets watchdog, The Financial Conduct Authority (FCA), had a busy day updating its warning list of unlicensed businesses that consumers “should avoid.”
A total of 143 new businesses, including significant exchanges like Huobi-owned HTX and KuCoin, were added to the warning list. Apart from the sentence “You should avoid dealing with this firm,” the warning list doesn’t reveal anything else significant about their risks in the UK.
It’s crucial to remember that the restrictions will be expanded to cover crypto-related businesses, regardless of where they are physically located.
For instance, neither Huobi nor KuCoin were founded in the U.K.; instead, they were established in Singapore and China, respectively.
However, in order to “carry out crypto asset activities” in the U.K., businesses must either be registered with the FCA or have been given temporary operating permission. The FCA’s head for cryptocurrency financial promotions, Jayson Probin, stated in July that failure to comply might lead to criminal charges :
“We will take robust action against persons illegally promoting to U.K. consumers. This may include, but it is not limited to, placing firms on our warning list requesting take downs of websites, social media accounts, apps and all other promotions that are in breach, and enforcement action.”
Since 2020, the FCA has received 291 applications for registration but has only authorized 38 of them, or around 13% of them, according to information released in August. Forty-two companies, including Bitstamp, Revolut, and Gemini, are listed as registered crypto asset providers on the FCA’s list as of the time of publication.
PayPal recently stopped processing cryptocurrency transactions for users in the United Kingdom while it figures out how to meet the FCA’s standards. In late September, the cryptocurrency exchange Bybit, which has its headquarters in Dubai, shut down all of its operations in the United Kingdom owing to “regulatory changes.”
HTX told CCN the company does not operate and/or promote services or products in the U.K. and added it respects and intends to continue complying with local regulations.
KuCoin did not immediately respond to a request for comment.
On October 6, Binance disclosed that it had teamed with the regional peer-to-peer lending platform Rebuildingsociety and launched a new domain specifically for U.K. customers.
Beginning on October 8, Binance’s U.K. retail users will be redirected to a localized domain that will only display Binance products and services that are allowed and in compliance with U.K. rules. This is in line with the compliance update. Spot and margin trading, Binance Pay, its nonfungible token (NFT) marketplace, loans, and other goods will be among them.
According to the exchange , Binance will stop providing items, including gift cards, referral bonuses, academy, and research, in order to comply with the new FCA regulations.
The modifications won’t affect customers exempt under the new FinProm regulations, such as some institutional and professional investors, and will solely apply to retail users in the UK.
On the same day, OKX also released a statement regarding FinProm compliance. The exchange said that it had cut the number of assets in its token sale to roughly 40 and added prominent risk warnings to its user interface.
One such cautionary note can be found at the top of OKX’s home page, asking visitors to spend a few minutes learning more about the dangers of investing in cryptocurrencies.