The UK Financial Conduct Authority (FCA) has issued a stern warning to cryptocurrency exchanges Huobi and KuCoin, along with 147 other companies, for marketing their services without obtaining the necessary approvals. The move comes as part of the UK’s expanding regulatory oversight of cryptoasset service providers, effective since October 8, 2023.
Under the new rules, crypto platforms, regardless of their geographical location, are obligated to prominently display risk warnings to UK-based consumers and meet heightened technical standards. Notably, a 24-hour cooling-off period for new customers is now mandatory.
The FCA expressed concerns that these companies might be promoting financial services or products without proper authorization, and it strongly advised people to refrain from engaging with them. Non-compliance could result in severe penalties, including takedown requests for websites and apps, substantial fines, and, in extreme cases, imprisonment.
Huobi, in response to the FCA’s warning, stated that it does not operate or market its services in the UK. However, the exchange affirmed its commitment to adapting its offerings to ensure compliance with local laws and regulations wherever it operates. Notably, Huobi holds licenses to operate in multiple countries, including Lithuania, Gibraltar, Dubai, Australia, the British Virgin Islands, and South America, but the UK does not appear on its list of prohibited jurisdictions.
KuCoin, a Seychelles-based exchange, reported that its platform is already restricted in several countries, including the United States, Singapore, Hong Kong, mainland China, Thailand, Malaysia, and Ontario, Canada. Interestingly, the UK is not among the locations mentioned on KuCoin’s restricted list.
These latest warnings from the FCA come as part of the UK’s proactive approach to identifying and publicizing crypto firms that fail to comply with the newly expanded regulatory framework. The FCA is actively updating its list of violators on an hourly basis to address emerging infractions swiftly.