The Financial Conduct Authority (FCA), the UK’s top financial regulator, has issued a warning to Bahamas-based cryptocurrency exchange FTX, alleging that it operates without authorization. The company joined a growing list of unregistered crypto-related companies that continue to outperform those registered with the FCA.
A warning note, dated September 16, states that the company “may be providing financial products or services in the UK without authorisation.” Addressing potential clients, the FCA notes that they will not be able to get their money back or seek the protection of the Financial Services Compensation Scheme “if things go wrong”.
At the end of August, the list of crypto companies registered with the FCA included 37 entities, Crypto.com being the last to join it. Other companies that managed to go through the registration process in 2022 to get AML approval were eToro UK, DRW Global Markets LTD, Zodia Markets (UK) Limited, Uphold Europe Limited, Rubicon Digital UK Limited and Wintermute Trading. LTD.
New crypto-focused regulations were instituted in January 2020 to allow the FCA to supervise companies operating in the space and enforce AML and Counter Terrorist Financing regulations.. As the FCA spokesperson explained to Cointelegraph in August:
“Successful registration depends on a company meeting the minimum standards we expect to prevent money laundering and terrorist financing, and we have seen too many red flags of financial crime that crypto asset companies have missed.”
Although the immediate repercussions for unregistered entities are uncertain, the FCA is surely not a vegetarian when it comes to law enforcement. On September 13, One of the UK’s largest electronic payment providers, ePayments, has closed its business operations three years after receiving a respective order from the FCA due to alleged deficiencies in its “financial crime controls”.
This is not the first time that FTX has drawn the attention of regulators. On August 19, the Federal Deposit Insurance Corporation (FDIC) issued a cease and desist letter for the company, claiming that it had misled the public about certain cryptocurrency-related products that were FDIC-insured.
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