FTX CEO Issues Scam Warning After UK Finance Regulator Suggests the Exchange is Operating Unlawfully

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Soon after the finan­cial reg­u­la­tor of the Unit­ed King­dom issued a warn­ing to con­sumers against the FTX cryp­tocur­ren­cy exchange, Sam Bankman-Fried, CEO & founder of the plat­form, took to Twit­ter to warn them about a scam­mer instead.

The CEO warned that “a scam­mer has been imper­son­at­ing FTX in the UK by phone.”

A day pri­or, in a state­ment post­ed to its web­site, the Finan­cial Con­duct Author­i­ty informed cus­tomers that it sus­pect­ed FTX was oper­at­ing with­out prop­er autho­riza­tion in the country.

“Almost all firms and indi­vid­u­als offer­ing, pro­mot­ing, or sell­ing finan­cial ser­vices or prod­ucts in the UK have to be autho­rized or reg­is­tered by us,” the reg­u­la­tor said. “This firm is not autho­rized by us and is tar­get­ing peo­ple in the UK.”

The devel­op­ment also comes at a time when FTX was push­ing expan­sion in Europe.

FTX Obtains CySEC license

Recent­ly, the Cyprus Secu­ri­ties and Exchange Com­mis­sion (CySEC) per­mit­ted FTX Europe to con­duct busi­ness as a Cyprus invest­ment firm (CIF), enabling it to own the local com­pa­ny it pre­vi­ous­ly bought.

The state­ment not­ed that FTX EU was per­mit­ted to serve the entire Euro­pean Eco­nom­ic Area with the Cyprus Invest­ment Firm License. As the only cryp­tocur­ren­cy exchange in the world with a full MiFID II license, held to sig­nif­i­cant­ly high­er require­ments than region­al reg­is­tra­tions as Cryp­to Asset Ser­vice Providers, FTX was set to offer an entire range of exchange services.

Sam Bankman-Fried said, “Secur­ing this license in the Euro­pean Union is an impor­tant step in achiev­ing our goal of becom­ing one of the most reg­u­lat­ed exchanges in the world.”

“We are con­tin­u­ing to work with CySEC and reg­u­la­tors across the globe to be the leader in the dig­i­tal asset indus­try when it comes to meet­ing the finan­cial stan­dards that are expect­ed of tra­di­tion­al finan­cial insti­tu­tions,” he added.

Europe has become a crucial playing field

Com­peti­tors of FTX like Coin­base, Gem­i­ni, Crypto.com, and Binance have announced per­mits in sev­er­al Euro­pean nations in recent months. For instance, coun­tries includ­ing Spain, France, and Italy recent­ly approved Binance’s busi­ness oper­a­tions. How­ev­er, tighter rules under the Mar­kets in Cryp­to-Assets (MiCA) frame­work can pose chal­lenges to these exchanges’ expan­sion plans.

The reg­is­tra­tions are a cru­cial step in advance of broad reg­u­la­tions under MiCA, even if they do not imply that the exchanges have been grant­ed a license to oper­ate as reg­u­lat­ed finan­cial insti­tu­tions in these nations.

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