Crypto Exchanges Faces Increased Scrutiny From UK’s FCA

• FCA added 143 crypto entities as ‘unauthorised firms.’
• New Financial focuses on how crypto is being promoted among common people and makes them aware of unauthorized firms.

The Financial Conduct Authority (FCA) added 143 crypto exchange entities to the warning list. The list includes the popular firms owned by HTX and KuCoin. These entities may face legal penalties if they continue to operate in the U.K. The warning list categorized them as ‘non-authorized firms.’

According to the list posted on FCA’s official website, 143 new firms were recently added to the list. FCA’s decision stems from a concern to regulate unauthorized entities. Their concern is to maintain the law and regulation within the crypto ecosystem as well. The UK government’s aim increase the number of regulated and licensed firms within the country. 

FCA’s Warning To Huobi And KuCoin

Huobi and KuCoin, both are popular cryptocurrency exchanges that offer various cryptocurrency-related services. Including crypto exchange, crypto withdrawal, etc. 

The FCA specifically mentioned, “This firm may be promoting financial services or products without our permission. You should avoid dealing with this firm.” 

In the notice, the FCA specifically warned the firms not to operate within the UK without the special authorization issued by the British Supervisory Commission. According to the UK government’s data, there are several crypto exchange entities within the UK, but only 42 entities are registered. 

Furthermore, the UK government is taking strict action to regulate crypto service providers. Data says there were about 290 applications for authorization. Out of 290 applications, only 13 % of them were approved. 

Government strict actions directly imply that any crypto services provider who wants to enter the market has to face a hard time in the UK. 

New Crypto Laws In The UK

Till now, the UK government has taken several hot and cold approaches to regulate the circulation of cryptocurrency. But now the UK is taking the regulation as a priority. The government drafted a new policy in a way that demonstrates how cryptocurrency is being marketed to the general public. Primarily, laws focus on avoiding risky investments without proper knowledge. 

The revised financial laws were implemented on the 8th of October. These rules apply to all the companies connected with the crypto market. This not only includes crypto exchange platforms but also any company related to digital assets. 

Furthermore, the UK government also released data related to financial promotions for the second quarter of 2023. There were 1,507 promotions withdrawn by the companies. Additionally, FCA issued a warning to 400 firms operating in the UK. Around 11% of the companies are clon of popular firms. 

To make people aware of the cloned companies, FCA stated a clear warning on their official website: “Make sure you only deal with authorized firms. If you deal with an unauthorized firm, you won’t be covered by the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong.“ 

The government is taking the entire control of the crypto market. In case any firm violates or operates against the law will be sued according to the UK’s regulations. 

Conclusion

UK government added 143 crypto service providers to the list of ‘unauthorized firms.’ Updated financial law says firms should get special permission from the FCA to operate in the UK.