In brief
- The FCA has begun legal proceedings against HTX, stating that the crypto exchange was not complying with rules that protect consumers from unfair and misleading marketing.
- HTX’s accounts are now blocked for UK users on several social media platforms.
- The regulator is preparing to take on a larger role in the regulation of crypto asset providers in the country.
The UK’s Financial Conduct Authority said Tuesday that it had begun legal proceedings against HTX, the crypto exchange founded by Tron creator Justin Sun, for “illegally promoting crypto asset services to UK consumers.”
The action comes under rules enacted in October 2023 that mandate firms providing crypto services comply with measures to protect consumers from “unfair and misleading marketing.” The regulator said in a statement it had previously warned HTX, formerly known as Huobi, about its advertising in the UK.
“HTX operates an opaque organisational structure, hiding the identities of its owners and the operators of its website. Repeated attempts by the FCA to engage with HTX have been ignored,” the regulator said in a statement on its website.
It added that, “Since issue of the proceedings, HTX has taken steps to restrict new UK customers from registering an account. However, existing UK users can still log in and access unlawful financial promotions, and HTX has given no assurance that the changes will be permanent. The FCA therefore remains concerned that the risk of ongoing breaches continues.”
The block appears to have already taken effect on several sites. HTX’s Facebook page is no longer accessible in the UK, replaced with a message stating “Content not available in United Kingdom. This is because we complied with a legal request to restrict this content.” Its Instagram and TikTok pages are also not accessible, though its X and YouTube remain unblocked.
HTX did not respond to a request for comment.
The FCA and UK crypto regulation
The FCA is shoring up its crypto provisions following a proposal by the Treasury in December to extend the FCA’s remit beyond current focus on anti-money laundering (AML) provisions. It is currently consulting on new rules covering areas such as consumer duty, conduct and oversight for crypto firms, as it moves towards bringing crypto regulation more in line with that of traditional finance. A full crypto regulatory regime is slated to launch in the UK in 2027, with applications for licensing opening later this year.
Over the past few weeks, several firms have been granted licenses which bring them under the scope of the FCA’s AML regulations. This week Blockchain.com secured FCA registration in the UK, following Ripple in January.
“Securing this registration… puts us under active oversight immediately,” a spokesperson for Blockchain.com told Decrypt. “Instead of waiting for legislation, Blockchain.com is now operating under the same rigorous standards as traditional finance and banks in the UK.”
Steve Smart, joint executive director of enforcement and market oversight at the FCA, said the advertising rules were “designed to support a sustainable and competitive crypto market in the UK, ensuring that consumers have what they need to make informed decisions.”
“’HTX’s conduct stands in stark contrast to the majority of firms working to comply with the FCA’s regime,” he said. Noting that it was the “first time we’ve taken enforcement action against a crypto firm illegally marketing their products to UK consumers,” Smart stated that the FCA will “continue to act against firms who ignore our rules.”
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