The Financial Conduct Authority (FCA), the UK’s main financial regulator, has issued a warning to Bahamas-based crypto exchange FTX, saying it is operating without authorization. The company joined a growing list of unregistered cryptocurrency-related companies that continue to outnumber those that have registered with the FCA.
A warning note, dated September 16, says the company “may be providing financial services or products in the UK without authorisation”. Addressing potential customers, the FCA notes that they will not be able to get their money back or seek the protection of the Financial Services Compensation Scheme “if things go wrong”.
At the end of August, the list of crypto companies registered with the FCA included 37 entities, with Crypto.com becoming the latest to join. Other companies that managed to go through the registration process in 2022 to gain approval for money laundering regulations were eToro UK, DRW Global Markets LTD, Zodia Markets (UK) Limited, Uphold Europe Limited, Rubicon Digital UK Limited and Wintermute Trading LTD.
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New regulations focused on cryptocurrency were instituted in January 2020 to allow the FCA to monitor companies operating in the space and enforce AML and counter-terrorism financing regulations. As the FCA spokesperson explained to Cointelegraph in August:
“Successful registration depends on a company meeting the minimum standards we expect to prevent money laundering and terrorist financing, and we’ve seen too many red flags of financial crime that crypto-asset companies seeking to register have Lost”.
While there is no clear understanding of what the immediate repercussions may be for unregistered entities, the FCA is certainly no vegetarian when it comes to enforcement. On September 13, one of the UK’s largest electronic payment providers, ePayments, closed its business operations after three years after receiving a respective order from the FCA due to alleged weaknesses in its “financial crime controls “.
It is not the first time recently that FTX has attracted the attention of regulators. On August 19, the Federal Deposit Insurance Corporation (FDIC) issued a cease-and-desist letter to the company, alleging that it had misled the public about certain cryptocurrency-related products that were insured by the FDIC.
