Michaela
The UK’s Financial Conduct Authority (FCA) has launched legal action against entities linked to the cryptocurrency exchange HTX over alleged unlawful crypto ads promoting digital asset services to British consumers. The case marks one of the regulator’s most high-profile moves yet to demonstrate that its tightened crypto marketing rules are being actively enforced.
Key points:
- The UK’s Financial Conduct Authority (FCA) has filed a lawsuit against entities linked to crypto exchange HTX, alleging illegal promotion of digital asset services to British consumers without proper authorization.
- The case underscores the FCA’s tougher enforcement of its Financial Promotions Regime, which prohibits unregistered firms, domestic or foreign, from marketing investment products to UK users.
- The regulator warned that unauthorized crypto firms often mislead users through online promotions and partnerships with regulated service providers, urging investors to confirm registration before engaging with any platform.
According to a report by Bloomberg, the lawsuit was submitted to London’s High Court on Tuesday, alleging that the exchange violated the UK’s financial promotions framework by marketing its services to local users without obtaining the required authorization or registration.
Since introducing the Financial Promotions Regime, the FCA has repeatedly cautioned overseas exchanges, including Binance, KuCoin, and OKX, over unapproved marketing activities, reinforcing its strict stance against unauthorized promotion of crypto services in the UK.
Earlier this year, the financial regulator issued several consumer alerts cautioning that HTX was promoting its services to UK residents without the necessary authorization. The exchange’s continued use of the Huobi brand across multiple jurisdictions also drew regulatory attention, raising questions about the cross-border reach of its marketing practices.
Under the UK’s Financial Services and Markets Act (FSMA), companies are prohibited from issuing any invitation or incentive to engage in investment activities unless the promotion is approved or authorized by a licensed firm. The rule applies to both domestic and foreign entities if their marketing efforts have the potential to reach or influence UK consumers.
Breaching this regulation is considered a criminal offense, punishable by up to two years in prison, an unlimited fine, or both. The FCA has also warned that licensed institutions partnering with unregistered crypto firms could face enforcement measures of their own, exposing them to significant compliance risks and reputational damage.
The regulator further cautioned that many unregistered crypto firms continue to target UK consumers through online marketing, often via websites or apps that integrate on- and off-ramp services from authorized partners. According to the FCA, this setup can create a false impression that such unregistered platforms are operating within legal boundaries.
The FCA reiterated that protecting consumers remains its top priority, emphasizing that firms such as HTX operating within the UK must meet regulatory standards to maintain transparency and accountability. The watchdog encouraged investors to verify registration status before engaging with any crypto-related service, warning that due diligence remains the strongest safeguard against potential fraud and misinformation in the evolving digital asset space.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
