United Kingdom’s Financial Regulator warns against using FTX
The Financial Conduct Authority issued a statement stating, “This company is not authorised by us and is targeting UK residents.”
Friday, the U.K.’s banking regulator released a statement on its website stating that the exchange is not allowed to provide financial services in the country. The message said, “This company is targeting individuals in the United Kingdom without our authorization.” You will not have access to the Financial Ombudsman Service or be covered by the Financial Services Compensation Scheme (FSCS), thus it is unlikely that you will get a refund if anything goes wrong.
The FCA monitors more than 50,000 financial institutions in the United Kingdom to guarantee compliance with legislation. It mandates that crypto-related businesses register and comply with anti-money laundering legislation, including the implementation of consumer KYC limitations.
The warning against Sam Bankman-multibillion-dollar Friend’s juggernaut is another instance of the FCA sounding the alarm about the digital assets industry. Since the surge in digital assets in 2021, the regulator has been keeping a tight check on the sector, advising firms against deceptive marketing tactics and blocking all Bitcoin ATMs in the nation.
It was also one of the numerous agencies that intervened against Binance over its regulatory methods last year, issuing a similar warning to FTX to indicate that the world’s largest cryptocurrency exchange constituted “a serious danger” to British customers. Binance introduced required KYC limitations and reduced its maximum leverage from 100x to 20x in response to regulatory scrutiny.
FTX works similarly to Binance from an offshore country. While both corporations maintain U.S. branches to satisfy the SEC and other American authorities, their primary entities provide a broader array of goods and services that are not governed by U.S. rules.
This month, FTX, based in the Bahamas, was granted a licence to operate in Cyprus, but it has yet to get authorization to operate in the United Kingdom. “Obtaining this licence in the European Union is a crucial step towards reaching our objective of being one of the most heavily regulated exchanges in the world,” Bankman-Fried said at the time.