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FCA Intensifies Scrutiny On Crypto Sector; Exchanges Face Regulatory Backlash

U.K. Regulator Cracks Down on Crypto Exchanges Huobi and KuCoin
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LONDON — The U.K. Financial Conduct Authority (FCA) has intensified its scrutiny on the cryptocurrency sector.

Exchanges including Huobi and KuCoin, among several others, have been highlighted for offering their services to U.K. residents without the necessary regulatory permissions.

As discussions about regulatory frameworks for digital assets gain momentum globally, such developments are expected to be a focal point at the forthcoming Zenger News’s Future of Digital Assets conference on Nov. 14.

In this photo illustration a KuCoin logo seen displayed on a smartphone screen. UK scrutinizes Crypto Sector. NIKOLAS KOKOVLIS/NURPHOTO VIA GETTY IMAGES. 

From Oct. 8, the U.K. expanded its financial promotion regulations to encompass all crypto asset service providers, irrespective of their geographical base.

The FCA now mandates all crypto platforms to present explicit risk advisories to U.K. users and adhere to elevated technical norms, which include a 24-hour waiting period for newcomers.

Among the 147 newly added entities, stated, “This firm may be promoting financial services or products without our permission. You should avoid dealing with this firm,” read the The FCA’s cautionary note for both Huobi and KuCoin.

Non-adherence to these guidelines can lead to severe repercussions, ranging from website takedowns and limitless monetary penalties to potential incarceration.

Addressing the issue, a representative from Huobi, also recognized as HTX, was quoted saying that the exchange “does not operate or market its services or products in the UK,” said HTX.

On the other hand, KuCoin CEO Johnny Lyu conveyed via email that KuCoin doesn’t function in the UK. However, it remains dedicated to “ensuring compliance with relevant laws and regulations in each country to the extent possible,” said Jonny Lyu, KuCoin Chief Executive Officer. 

Earlier this year, the U.S. Securities and Exchange Commission accused Tron (CRYPTO: TRON) founder Justin Sun of deceptive practices and market manipulation linked to TRX, Tron blockchain’s native cryptocurrency.

In this photo illustration, the Huobi logo is seen displayed on a smartphone. UK’s FCA Scrutinizes Crypto Operations. RAFAEL HENRIQUE/SOPA IMAGES/LIGHTROCKET VIA IMAGES.

Although Huobi claims to possess operational licenses in several regions, including Lithuania, Gibraltar, and Dubai, the U.K. isn’t mentioned as a restricted area on its platform.

Seychelles-based KuCoin offers services in several regions, including the U.S., Singapore, and mainland China. The U.K. doesn’t feature on its list of restricted territories.

© 2023 Zenger Zenger News does not provide investment advice. All rights reserved.

Produced in association with Benzinga

Edited by ISAAC OKOTH NYAMUNGU and Newsdesk Manager

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