FTX deemed as an “Unauthorized” entity in the UK

Sahana Kiran
Source – Unsplash

Prominent cryptocurrency exchange FTX has been making headlines for an array of reasons. From rumors about how the platform was on the verge of acquiring its counterpart Huobi and Skybridge, to Sam Bankman Fried [SBF] trying to help out bankrupt firms, FTX has been under the spotlight in 2022.

Now, it seems like regulators in the United Kingdom weren’t very happy with the exchange’s reach. Therefore, with the intention of limiting the presence of the exchange, the Financial Conduct Authority [FCA] announced that the SBF-led exchange wasn’t authorized to operate in the region.

As per a recent warning issued by the FCA, FTX was providing financial services in the UK without a license. Elaborating on the same, the notice read,

“This firm is not authorized by us and is targeting people in the UK. You will not have access to the Financial Ombudsman Service or be protected by the Financial Services Compensation Scheme (FSCS), so you are unlikely to get your money back if things go wrong.”

Furthermore, this wasn’t the first time that FTX locked horns with UK regulators. Just last month, the Federal Deposit Insurance Corporation [FDIC] issued cease and desist letter against the firm for misleading the public about crypto being insured by the FDIC.

This warning is likely to close prominent doors for FTX in the UK. However, it should be noted that the exchange has been on an expansion spree throughout the rest of Europe. Recently, the firm secured a green signal from the Cyprus Securities and Exchange Commission [CySEC] to operate in the region.

Over the last couple of months, FTX was seen mirroring its rival Binance. Apart from European countries, the firm was seen veering into Japan, South Korea, and Australia.

Will Crypto thrive in the presence of the FCA?

Sadly, the UK has very few positive stories with regard to the crypto industry. The FCA has been quite stringent in terms of regulating the industry. Crypto has undoubtedly taken the center stage, and governments across the globe have been aiding this growth. While the former Chancellor of the Exchequer Rishi Sunak intends to make UK a global hub for crypto, the FCA would likely hinder this aspiration.

The FCA decided to impose the registration scheme for crypto firms back in 2020. The watchdog gave these firms a deadline of one year. As the FCA continued rolling out rigid laws, about 70 crypto firms decided to withdraw their applications.

Additionally, Crypto.com managed to secure a thumbs up from the FCA. However, this crypto exchange was allowed to carry out “certain crypto asset activities” in the UK.

FCA’s latest move in categorizing FTX as an “unauthorized” firm would further strengthen the notion that the UK isn’t very accommodating towards the crypto industry.