UK financial watchdog issues warning against crypto exchange FTX

Please fol­low and like us:
Pin Share

The UK’s finan­cial reg­u­la­tor has warned con­sumers against deal­ing with FTX, the cryp­tocur­ren­cy exchange run by bil­lion­aire Sam Bankman-Fried, in the lat­est clash between British author­i­ties and off­shore dig­i­tal asset companies.

The Finan­cial Con­duct Author­i­ty said the Bahamas-based exchange appeared to be offer­ing prod­ucts and ser­vices in the UK with­out its autho­ri­sa­tion, accord­ing to a state­ment on the regulator’s website.

“This firm is not autho­rised by us and is tar­get­ing peo­ple in the UK,” the state­ment said.

The move against FTX, one of the largest dig­i­tal asset exchanges, comes after a bruis­ing bat­tle between the FCA and Binance as the UK steps up efforts to con­trol the often unreg­u­lat­ed world of cryp­tocur­ren­cies.

The FCA inter­vened against Binance last year, say­ing its “com­plex and high-risk finan­cial prod­ucts” posed “a sig­nif­i­cant risk to con­sumers” and that the world’s largest cryp­to exchange had “failed” to respond to some of its basic queries, mak­ing it impos­si­ble to over­see the sprawl­ing group.

Binance, one of FTX’s chief rivals, has pledged to become ful­ly com­pli­ant with reg­u­la­tion and to reap­ply for super­vi­sion in the UK.

A spokesper­son for FTX said they believed the reg­u­la­tor intend­ed to warn con­sumers about a scam imper­son­at­ing the exchange because some of the phone num­bers the reg­u­la­tor list­ed had been report­ed as linked to scams.

How­ev­er, the spokesper­son acknowl­edged that the web­site iden­ti­fied by the FCA — — is the real web­site of the com­pa­ny. “We’re look­ing into it and com­mu­ni­cat­ing with reg­u­la­tors,” said FTX. The FCA said in response: “It’s impor­tant we issue warn­ings as quick­ly as pos­si­ble and [we] will issue updates if fur­ther infor­ma­tion comes to light.”

Cryp­to exchange and wal­let providers have to reg­is­ter with the FCA for anti-mon­ey laun­der­ing super­vi­sion if their dig­i­tal asset activ­i­ty is “car­ried on by way of busi­ness in the UK”, accord­ing to an FCA guide.

The FCA and oth­er finan­cial reg­u­la­tors around the world have faced a chal­lenge try­ing to pro­tect con­sumers and impose stan­dards in cryp­to mar­kets, where many of the largest groups are based in off­shore juris­dic­tions. Both FTX and Cay­man Island-reg­is­tered Binance have set up Amer­i­can affil­i­ates to appease US author­i­ties but they offer ser­vices in oth­er coun­tries from their inter­na­tion­al base. 

FTX’s Euro­pean divi­sion this month announced that Cyprus’s finan­cial reg­u­la­tor had grant­ed it an invest­ment firm licence as the cryp­to firm push­es to expand across the con­ti­nent. Bankman-Fried, FTX’s chief exec­u­tive, said at the time: “Secur­ing this licence in the Euro­pean Union is an impor­tant step in achiev­ing our goal of becom­ing one of the most reg­u­lat­ed exchanges in the world.” 

The FCA said UK clients deal­ing with FTX would not have access to UK con­sumer pro­tec­tions such as the Finan­cial Ombuds­man or Finan­cial Ser­vices Com­pen­sa­tion Scheme and would be “unlike­ly to get [their] mon­ey back if things go wrong”.

Source link

Please fol­low and like us:
Pin Share

Leave a Reply

Your email address will not be published.