According to the Financial Conduct Authority (FCA), the FTX cryptocurrency exchange might be providing services with no authorization. Just recently, the British regulator put out a warning for the cryptocurrency exchange, FTX. According to them, FTX is operating without authorization, and this may lead to legal issues. This makes FTX one of the ever-growing group of “unauthorized” cryptocurrency-related companies.
The FCA issued this warning back on the 16th of September. What makes the warning even more interesting is the fact that the warning was also directed to FTX users. In the statement, FCA claims that FTX customers must keep their guard up because the Financial Services Compensation Scheme can’t help them if anything goes wrong. Of course, many people see this as an attempt to scare people from using exchanges and getting into crypto. Moreover, the market is already full of fear, and spreading FUD is easier than ever.
Until September, there were 37 FCA-registered crypto companies. Crypto.com was the latest cryptocurrency company to register. Two of the main reasons that crypto companies need to join the FCA are customer safety and money laundering regulations. Another name that is part of the registered group is eToro UK.
What Happens to Unregistered Companies?
Until today, there have not been clear statements on how unregistered companies are punished in the short term. However, the FCA has the authority to enforce whatever decision they make for such companies. One of the most recent scenarios where the FCA acted vigorously was on the 13th of September 2022. On that day, ePayments, one of the biggest e-payment providers in the UK, had to stop its business operations. This came three years after they received a warning from the FCA regarding supposed weaknesses in its “financial crime controls” documentation.
Unfortunately for FTX, this is not the first time regulators have warned the company. On the 19th of August, the Federal Deposit Insurance Corporation (FDIC) issued a warning to the company. This warning included a statement that claimed that the company misinformed and misled the public about certain cryptocurrencies. The “war” between cryptocurrency exchanges and regulators has been constant since the first exchange made its debut. In this case, the British regulator FCA is going back and forth with FTX and several other cryptocurrency exchanges and businesses.