UK’s financial watchdog warns against crypto exchange FTX
Britain’s financial regulator has warned consumers against dealing with FTX, the cryptocurrency exchange run by billionaire Sam Bankman-Fried, in the latest clash between UK authorities and offshore digital asset companies.
The Financial Conduct Authority said the Bahamas-based exchange appeared to be offering products and services in the UK without its authorisation, according to a statement on the regulator’s website.
“This company is not authorized by us and is targeting people in the UK,” the statement said. FTX did not immediately respond to a request for comment.
The move against FTX, one of the biggest exchanges for digital assets, comes after a fierce battle between the FCA and Binance, as Britain steps up efforts to control the often unregulated world of cryptocurrencies.
The FCA took action against Binance last year, saying its “complex and high-risk financial products” posed “a significant risk to consumers” and that the world’s largest crypto exchange had “failed” to answer some of the fundamental questions, making it impossible . to supervise the dispersed group.
Binance, one of FTX’s main rivals, has pledged to become fully compliant with regulation and to reapply for UK oversight.
Crypto exchange and wallet providers must register with the FCA for anti-money laundering oversight if their digital asset activity is “carried on as a business in the UK”, according to an FCA guide.
The FCA and other financial regulators around the world have faced a challenge trying to protect consumers and enforce standards in crypto markets, where many of the largest groups are based in offshore jurisdictions. Both FTX and Cayman Island-registered Binance have set up US affiliates to satisfy US authorities, but offer services in other countries from their international base.
FTX’s European division announced this month that Cyprus’s financial regulator had granted it an investment company license, as the crypto firm pushes to expand across the continent. Bankman-Fried, FTX’s CEO, said at the time: “Securing this license in the EU is an important step in achieving our goal of becoming one of the most regulated exchanges in the world.”
The FCA said UK clients trading with FTX will not have access to UK consumer protections such as the Financial Ombudsman or the Financial Services Compensation Scheme and are unlikely to [their] money back if things go wrong”.
