The Financial Conduct Authority (FCA), the UK’s financial watchdog, has issued a warning to the public about 143 crypto exchanges that are not authorized to operate in the country. The list includes some of the major players in the crypto industry, such as Huobi-owned HTX and KuCoin.
The FCA stated that these crypto exchanges are “non-authorized firms” that may be offering products or services that are high-risk, misleading, or fraudulent. The regulator advised consumers to avoid dealing with these firms and to check its register of authorized firms before investing in any crypto-related products or services.
The FCA also reminded consumers that they are unlikely to have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if they deal with non-authorized firms. This means that they may lose all their money without any recourse or protection.
The FCA’s warning comes amid a series of regulatory actions and developments in the UK’s crypto space. In June, the FCA banned Binance, the world’s largest crypto exchange by trading volume, from conducting any regulated activity in the UK. In August, the FCA extended the deadline for crypto firms to comply with its anti-money laundering rules until March 2023. In September, Bybit, another major crypto exchange, suspended its services in the UK due to “regulatory changes”.
The FCA’s warning also coincides with the government’s consultation on its plans to regulate crypto and protect consumers. The government announced in February that it intends to introduce a robust and comprehensive framework for cryptoasset activities, covering aspects such as market integrity, consumer protection, financial intermediation, and lending.
The government’s consultation is open until April 30, 2023, and invites views from stakeholders and interested parties on its proposals. The government stated that its aim is to embrace technological change and innovation while mitigating the most significant risks posed by crypto technologies.