Chief Financial Regulator in the UK, FCA,  Lists the FTX Digital Asset Exchange as an ‘Unauthorized’ Firm

Late last week, The Financial Conduct Authority (FCA), the chief financial regulator in the United Kingdom, sent out a warning to the massive Bahamian digital asset exchange FTX. In the notice, the FCA claimed that the company “may be providing financial services or products without authorization.”

 

FTX is one of the many unregistered digital asset-related businesses currently not signed up with the FCA. 

 

The September 16th note states that the firm is providing its financial services and products in the UK without authorization. The FCA also made a statement to users of the digital asset exchanges, stating that they will have no ability to get their money back or seek the protection of the Financial Services Compensation Scheme if something occurs on the platform.

 

In January 2020, FCA implemented digital asset-focused regulations, which allowed them to oversee businesses operating within the space, allowing them to also enforce AML and counter-terrorism financing regulations. The FCA explained the reasoning behind the instituted regulations within the same year they were released:

 

“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.”

 

While the repercussions of being classified as an unregistered business are unknown, the FCA is known for enforcing its policies and regulations. Early last week, on September 13th, ePayments, one of the more prominent electronic payment providers in the United Kingdom, stopped business operations following an order from the FCA due to alleged weaknesses in its “financial crime controls” three years ago. 

 

The digital asset exchange has already been targeted by regulators, with the Federal Deposit Insurance Corporation (FDIC) issuing cease and desist letter for the company last month. The FDIC claimed that FTX misled the public about certain cryptocurrency-related products being insured by the corporation.