UK Financial Watchdog Retracts Official Warning About Kraken After Confusing The Exchange With Online Scammers
UK Financial Watchdog Retracts Official Warning About Kraken After Confusing The Exchange With Online Scammers
March 6, 2020
UK Financial Watchdog Retracts Official Warning About Kraken After Confusing The Exchange With Online Scammers
UK Financial Watchdog Retracts Official Warning About Kraken After Confusing The Exchange With Online Scammers
March 6, 2020

A UK financial watchdog hastily retracted an official warning about Kraken after apparently confusing the exchange with online scammers, but a similar warning about BitMEX remains active.

On March 3, it has been reported by the United Kingdom Financial Conduct Authority (FCA), who published a notice on its website cautioning citizens that the second-largest U.S. cryptocurrency exchange by volume, Kraken, is not authorized to operate in the U.K.

However, the warning stated the company is “targeting people in the UK”:

“We believe this firm has been providing financial services or products in the UK without our authorization. Find out why to be especially wary of dealing with this unauthorized firm and how to protect yourself from scammers.”

 The FCA quickly took the notice down a few hours ago after a complaint from Kraken.

A Kraken representative said that it believes the notice referred to the activities of “investment scammers” claiming to operate under the Kraken brand. One tip-off was that the FCA notice cites two Gmail addresses as official contacts for Kraken.

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The representative said:

“The warning was based on Gmail addresses and phone numbers that belonged to investment scammers falsely using our brand and we’ve reached out to the FCA to get this clarified […] Kraken Futures (CryptoFacilities) is already registered with the FCA under the reference number 757895.”

On the same day, the FCA published a similar generic notice aimed at popular cryptocurrency derivatives exchange BitMEX.

The warning asserts that BitMEX has been conducting regulated activities in the U.K. despite receiving no authorization to offer financial products in the jurisdiction. The notice highlights the email accounts “[email protected]” and “[email protected]”, both of which appear to be official addresses.

Likewise, the BitMEX notice has remained online for 48 hours as of this writing.

During October 2019, the FCA proposed a ban on cryptocurrency derivatives that target retail investors, similar to the types of products offered by BitMEX.

However, in January, the FCA assumed anti-money laundering and counter-terrorist financing (AML/CTF) responsibilities for businesses operating with crypto assets.

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Thus, the regulator quickly introduced new fees for crypto businesses — reducing them from £4,000 to £2,000 for businesses annual incomes of less than £250,000, while increasing the fee by 150% to £10,000 for businesses netting more than $250,000.

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Ishita Bora

Ishita Bora is a Senior Content Creator at Digital Notice Media Labs with experience of 1.5 years. She has completed her Master's Degree in Language and Linguistics in 2019 from Gauhati University, India. Her interest lies in blockchain technology and cryptocurrency space. She loves writing about blockchain and other blockchain-related articles.