The United Kingdom’s Financial Conduct Authority (FCA) has released a warning list of unauthorized crypto firms—and warned customers against doing business with them. This comes less than a month after the U.K. capital markets issued a final warning to crypto entities that’ve been blatantly ignoring the country’s new financial promotion rules on crypto assets.
As per the new rules, which took effect on October 8, crypto businesses “must cease making illegal financial promotions to U.K. customers.” Failing to comply could land a person in jail for up to 2 years. Other punishments include “an unlimited fine and enforcement action.”
Compliance matters
Despite the financial watchdog’s stern warning, a plethora of “unauthorized and unregistered crypto businesses” continue to operate in the U.K. The FCA has rounded up 143 such entities in a list – which includes high-profile exchanges such as Huobi-owned HTX and KuCoin.
It’s pertinent to note that the UK allows only those firms to “carry out crypto assets activities” who’re either registered with the FCA or have received permission to operate temporarily. In July, Jayson Probin, crypto financial lead at the FCA, had warned of strict action against those straying from rules.
“We will take robust action against persons illegally promoting to U.K. consumers. This may include, but it is not limited to, placing firms on our warning list requesting take downs of websites, social media accounts, apps and all other promotions that are in breach, and enforcement action,” Probin had said then.
Since January 2020, the FCA has reportedly received applications from nearly 300 crypto companies seeking permission to operate in the country. But only 42 of them have been granted a license, including Bitstamp, Revolut and Gemini.
Regulatory hurdles forcing crypto companies out of UK
With the UK regulator tightening its grip on the crypto industry, several companies are winding down operations in the country. While PayPal has temporarily halted crypto buying services in the UK, crypto exchange Bybit has fully exited the UK market.
Companies running misleading crypto ads and “finfluencers” promoting get-rich-quick schemes and other risky investments are also in FCA’s crosshairs. In August, Todayq News reported that the Bank of England could co-regulate the stablecoins sector with the FCA.
And the UK is not alone: the US has also been cracking down on non-compliant crypto ads. Earlier this year, the New York Department of Financial Services (NYDFS) released guidelines for crypto ads and stablecoins. French lawmakers have also called for a ban over the promotion of crypto assets.
