The UK’s regulator for financial services, the Financial Conduct Authority (FCA) has issued a caution to all consumers to avoid dealing with FTX the cryptocurrency exchange owned by the billionaire banker Sam Bankman-Fried.
The letter of warning stated that “We believe this firm may be providing financial services or products in the UK without our authorisation.” The letter further stated, “This firm is not authorized by our agency and aiming at customers living in the UK. There is no access to our Financial Ombudsman Service or be protected by the Financial Services Compensation Scheme (FSCS) which means that it is unlikely that you will receive your money back in the event that things are not as they should be.”
Related: Australia’s financial crimes watchdog launches an investigation into Entain, a British company.
FTX did not respond immediately to a request for comments as reported by Financial Times. Financial Times.
In addition, as per an FCA guideline, a gap is forming among EU and UK regulations for crypto, and cryptocurrency exchanges and wallet providers must register with the FCA to ensure that they are not a target for money laundering when their activity in the field of digital assets occurs “carried on by way of business in the UK.”
UK Alert About Crypto Regulations
Recently the UK issued regulations that were primarily directed at stablecoins. The nature of this asset class and its rapid growth has reportedly alarmed the authorities in charge of monetary policy, since they could use it to undermine the financial system, and also to evade the sanctions imposed on Russia.
Then following, in the following months, UK Treasury’s Office of Financial Sanctions Implementation has introduced new regulations under which all cryptocurrency exchanges are required to report suspected sanctions violations in writing to UK authorities.
The new UK rules were enacted as a response to Russia’s invasion of Ukraine and amid increasing concern about the possibility that cryptocurrency and other cryptocurrency assets have been used in order to circumvent the restrictions placed on the aggressor state due their invasion of Ukraine.
On the Flipside
- Recently the UK’s FCA was in a battle with another offshore digital asset business and the most well-known cryptocurrency exchange known as Binance – as the nation intensified its efforts to regulate cryptocurrency.
- The FCA has taken action against Binance in the past year, stating that it’s “complex and high-risk financial products” pose “a significant risk to consumers” and that the world’s most popular crypto exchange “failed to” respond to certain of its most basic questions and made it difficult to manage the vast group.
Why You Should Care
The United Kingdom’s FCA has been trying to reassure investors that working with financial companies that have been registered or authorized by the FCA can provide investors with greater security in the event of a mishap.
Related: BIS officials say that the adaptability and openness of crypto are key to an ideal financial system.
Find out More about the United Kingdom’s strategy for regulation of crypto:
UK to Announce New Regulatory Plan Amid Crypto Firm Closure Fears
Find out the latest news concerning FTX:
FTX Emerges As The Highest Bidder In The Voyager Digital Bankruptcy Auction