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FCA warns crypto unicorn FTX is not authorised to operate in UK

Image credit: Sergei Elagin via Shutterstock

The Financial Conduct Authority (FCA) has issued a warning that Bahamas-based crypto exchange firm FTX is operating unauthorised digital asset services in the UK.

Founded in 2018, FTX is one of the largest exchanges of cryptocurrencies in the world, valued at $32bn.

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

The FCA said that those in the UK investing in cryptoassets through FTX would be at greater risk due to it being unregistered.

“You will not have access to the Financial Ombudsman Service or be protected by the Financial Services Compensation Scheme (FSCS), so you are unlikely to get your money back if things go wrong,” the FCA warned.

UKTN has contacted FTX for comment.

Cryptoasset firms are required to be registered with the FCA to operate in the UK, although the level of jurisdiction the regulator has over the sector remains the subject of debate.

The UK is yet to iron out a robust regulatory framework governing the trading of cryptoassets. However, progress has been made through a Treasury inquiry and recommendations from government-backed legal bodies.

Under the current rules, the FCA requires crypto firms to register with the regulator to conduct authorised services in the country. A special exemption has been applied to Revolut, which is not authorised by the FCA but remains on a temporary crypto register.

“In practice, crypto companies have found the FCA’s registration process to be slow and cumbersome, and many have chosen to look elsewhere for their registration – for example, FTX is registered in the Bahamas and recently obtained a licence from the Cypriot financial authorities that permits it to provide services in the EU,” said Kate Gee, counsel at law firm Signature Litigation.

“At a time where other global regulators are perceived to be moving more quickly than the FCA, this warning against dealing with FTX may be intended to encourage it and others to commence – and persevere with – the FCA’s registration process, in the same way that Binance and Crypto.com recently have done.”

Singapore’s Crypto.com received regulatory approval from the FCA in August.