Reports said that the Financial Conduct Authority (FCA), the chief financial regulator in the United Kingdom, has issued a warning to Bahama-based crypto exchange FTX, claiming it operates without authorization.
It has been reported that the company joined a growing list of unregistered cryptocurrency-related businesses that continue to outweigh those signed up with the FCA. A warning note, dated September 16, claims that the firm “may be providing financial services or products in the UK without authorization.”
However, addressing the potential customers, the FCA notes that they won’t be able to get their money back or seek the protection of the Financial Services Compensation Scheme “if things go wrong.” By the end of August, the list of crypto companies registered with the FCA included 37 entities, with Crypto.com being the latest. Other firms that managed to go through the registration process in 2022 to achieve Money Laundering Regulations approval were eToro UK, DRW Global Markets LTD, Zodia Markets (UK) Limited, Uphold Europe Limited, Rubicon Digital UK Limited, and Wintermute Trading LTD.
The report said that new cryptocurrency-focused regulations were instituted in January 2020 to allow the FCA to supervise businesses operating in the space and enforce Anti-Money Laundering and Counter-Terrorist Financing regulations.
In August, FCA explained:
“Successful registration depends upon a firm meeting the minimum standards we expect to prevent money laundering and terrorist financing, and we have seen too many financial crime red flags missed by the crypto asset businesses seeking registration.”
Although there is no clear understanding of what the immediate repercussions for the unregistered entities might look like, the FCA is surely no vegetarian when it comes to enforcement.
Likewise, on September 13, one of the largest electronic payment providers in the United Kingdom, ePayments, closed its business operations three years later after receiving a respective order from the FCA due to alleged weaknesses in its “financial crime controls.”
Thus, this is not the first time lately that FTX has caught the attention of the regulators. On August 19, the Federal Deposit Insurance Corporation (FDIC) issued a cease and desist letter for the company, alleging that it had misled the public about certain cryptocurrency-related products being insured by FDIC.