The Financial Conduct Authority (FCA) has issued a warning that Bahamas-based FTX is operating unauthorized digital asset services in the UK.
Founded in 2018, FTX is one of the largest cryptocurrency exchanges in the world, valued at $32 billion.
“This firm is not authorized by us and is targeting people in the UK,” the regulator said in its warning.
The FCA has said that those in the UK investing in crypto assets through FTX will be at greater risk due to being unregistered.
“You won’t have access to the Financial Ombudsman Service or be protected by the Financial Services Compensation Scheme (FSCS), so you’re unlikely to get your money back if things go wrong,” the FCA warns.
UKTN FTX has been contacted for comment.
Crypto asset companies must be registered with the FCA to operate in the UK, although the regulator’s level of jurisdiction over the sector remains a matter of debate.
The UK has yet to develop a robust regulatory framework governing the trading of crypto-assets. However, progress was made thanks to a Treasury request and recommendations from legal entities supported by the government.
Under current regulations, the FCA requires crypto firms to register with the regulator to provide authorized services in the country. A special exemption has been applied to Revolut, which is not authorized by the FCA, but remains on a temporary crypto registry.
“In practice, crypto companies have found the FCA registration process to be slow and cumbersome, and many have chosen to seek registration elsewhere – for example, FTX is registered in the Bahamas and recently received a license from the Cypriot financial authorities allowing it to provide services in the EU,” – said Kate Gee, of counsel at the law firm Signature Litigation.
“At a time when other global regulators are believed to be moving faster than the FCA, this warning against fighting FTX may be intended to encourage it and others to start – and continue – the FCA registration process in the same way as Binance and Crypto. com recently did.”
Singapore Crypto.com received regulatory approval from FCA in August.
FCA warns crypto unicorn FTX is not authorised to operate in UK