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UK Regulator Says FTX Not Recognized To Conduct Business

 |  September 19, 2022

Britain’s top financial regulator is alerting consumers that Sam Bankman-Fried’s cryptocurrency exchange FTX is operating in the UK without proper authorization.

The Financial Conduct Authority (FCA) said the Bahamas-based exchange seemed to be offering products and services in the UK without having filed with the regulator or received authorization, according to a statement issued by the watchdog.

“We believe this firm may be providing financial services or products in the U.K. without our authorization,” the regulator said. “Almost all firms and individuals offering, promoting or selling financial services or products in the UK have to be authorized or registered by us.” 

The FCA said that FTX and any firm in the U.K. carrying out specific crypto asset activities must comply with the amended “Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations,” and register with the regulator.

“This firm [FTX] is not authorized by us and is targeting people in the U.K. 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,” according to the statement.

FTX Europe was established through an incorporated investment firm in Cyprus, PYMNTS reported last month. 

When the EU-wide Markets in Crypto Assets (MiCA) legislation comes into effect, firms wanting to offer services related to crypto assets will have to go through an entity registered with an EU-based regulator like Cyprus Securities and Exchange Commission (CySEC).

The FCA advises consumers to check and make sure a firm they’re dealing with or planning to use is authorized or registered with the regulator.

“Dealing with financial firms that are authorized or registered by us gives you greater protection if things go wrong. Check the Financial Services (FS) Register to ensure they are authorized or registered. It has information on firms and individuals that are, or have been, regulated by us,” per the statement.