UK Financial Watchdog Issues Warning Against FTX

Twitter icon  •  Published 1年前  •  Nikolas Sargeant

The UK financial watchdog, the FCA, has claimed that a group led by the CEO of FTX Sam Bankman-Fried, is “targeting” consumers without authorization

The UK financial watchdog, the FCA, has claimed that a group led by the CEO of FTX Sam Bankman-Fried, is “targeting” consumers without authorization. The Bahaman-based cryptocurrency exchange is one of the world’s leading platforms and has been expanding its services across the globe throughout 2022. 

The UK’s Financial Regulator Issues A Warning

The Financial Conduct Authority (FCA) has warned consumers, advising them to be cautious when dealing with FTX. The British authorities have had a rocky past with cryptocurrency, banning Binance to stop all UK regulated activity in June 2021 over worries about consumer protections amid a nationwide crackdown.

However, with numerous countries across the globe now in talks with major exchanges like Binance and FTX, it is a surprise that this has happened. 

The warning has been sent out as the FCA believes that FTX has been offering its services in the UK without authorization. A statement posted on the regulatory authority’s website claims much, stating, “This firm is not authorized by us and is targeting people in the UK.”

The UK’s stringent cryptocurrency laws have been tested continuously throughout the mainstream adoption of digital currencies. Most recently, the FCA has been locking horns with Binance to broadly increase regulatory measures to control the exchange in the UK and cryptocurrencies. 

The FCA commented on Binance’s activity last summer, saying its “complex and high-risk financial products” had “failed” to meet the standards and basic requirements necessary for the UK’s regulatory bodies to oversee the products and features. The FCA believed that Binance posed “a significant risk to consumers,” though there has since been some progress to open operations. 

Prominent Exchanges Seeking Regulatory Approval

Having surpassed Coinbase earlier this year as one of the biggest exchanges based on daily trading volume, FTX is now one of Binance’s chief rivals. As the biggest exchange in the world, Binance strives to be the go-to exchange for customers looking to begin investing in digital currency. 

Brexit has meant a divide in EU and UK crypto regulation. Crypto exchanges and wallet providers must register with the FCA for anti-money laundering supervision. The FCA has difficulty trying to protect consumers and impose standards in crypto markets, where many crypto groups are offshore. 

FTX and Binance are based in the Caribbean but have set up American affiliates to satisfy the regulatory demands in the US. Things haven’t been so straightforward in the UK. The FCA recently said that UK clients dealing with FTX would not have consumer protection, such as the Financial Ombudsman or Financial Services Compensation Scheme.

Author

Nikolas Sargeant

Nik is a content and public relations specialist with an ever-growing interest in Crypto. He has been published on several leading Crypto and blockchain based news sites. He is currently based in Spain, but hails from the Pacific Northwest in the US.