Bahama’s crypto exchange FTX was warned by the Financial Conduct Authority (FCA), which is the UK’s chief financial regulator. It claimed it does not have authorization. The company joined a growing list of unregistered cryptocurrency-related businesses that continue to outweigh those signed up with the FCA.
The warning note was dated September 16 and stated that the firm may be providing UK financial services or products without authorization. It also warned potential customers that they will not be able to recover their money or apply for the Financial Services Compensation Scheme protection “if things go wrong.”
The list of registered crypto companies with the FCA had grown to 37 entities by August. Crypto.com was the latest addition. Other firms that were able to pass the registration process to obtain approval under the Money Laundering Regulations in 2022 included eToro UK and DRW Global Markets LTD.
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New cryptocurrency-focused regulations were instituted in January 2020 to allow the FCA to supervise businesses operating in the space and enforce AML and counter-terrorism financing regulations. Cointelegraph was told by the spokesperson of the FCA in August that:
“Successful registration is dependent upon a firm meeting minimum standards that we expect to prevent money laundering or terrorist financing. We have seen too many financial crime red alerts ignored by crypto asset businesses looking to register.”
While it is not clear what the immediate consequences for unregistered entities could look like, the FCA can be relied upon to enforce the law. ePayments, one of the largest providers of electronic payments in the United Kingdom was shut down on Sept. 13th, three years after it received an order from the FCA. This was due to alleged flaws in its “financial crimes controls”.
The regulators have been paying attention to FTX for a while. On Aug. 19, the Federal Deposit Insurance Corporation (FDIC) issued cease and desist letter for the company, alleging that it had misled the public about certain cryptocurrency-related products being insured by FDIC.