Crypto exchanges Huobi and KuCoin were among dozens of digital asset companies added to the UK Financial Conduct Authority’s warning list on Sunday for marketing their services in the UK without proper approvals, as the regulator tightens its grip on the industry.
(Bloomberg) — Crypto exchanges Huobi and KuCoin were among dozens of digital asset companies added to the UK Financial Conduct Authority’s warning list on Sunday for marketing their services in the UK without proper approvals, as the regulator tightens its grip on the industry.
The UK’s rules on financial promotions were widened starting on Oct. 8 to include cryptoasset service providers — regardless of their location. All crypto platforms are now required by the regulator to display clear risk warnings to UK-based consumers and meet higher technical standards, including a 24-hour cooling-off period for new customers.
“This firm may be promoting financial services or products without our permission. You should avoid dealing with this firm,” the FCA wrote as a generic warning for Huobi and KuCoin, which were among the 147 companies it added to the list. Penalties for non-compliance can include takedown requests for websites and apps, unlimited fines and even prison time.
A spokesperson for Huobi, also known as HTX, said the firm “does not operate or market its services or products in the UK.” KuCoin does not operate in the UK, but is committed to adjusting its “products and services accordingly to ensure compliance with relevant laws and regulations in each country to the extent possible,” the firm’s chief executive officer Johnny Lyu said in an emailed statement.
Read: UK Plans Swift Action if Crypto Firms Break New Promotion Rules
Justin Sun, the crypto mogul who runs Huobi, has run into regulatory rough waters before. The US Securities and Exchange Commission in March accused Sun of fraud and market manipulation using TRX, the native cryptocurrency of his Tron blockchain. Huobi says it holds licenses to operate in Lithuania, Gibraltar, Dubai, Australia, British Virgin Islands and South America, according to its website, but doesn’t list the UK as a prohibited venue.
Read: A $1.8 Billion Crypto Project Casts a Shadow Over Huobi Exchange
Seychelles-based KuCoin says its platform is restricted in countries including the US, Singapore, Hong Kong, the mainland of China, Thailand, Malaysia and Ontario, Canada. It too doesn’t name UK in its restricted locations list.
The new warnings come following the UK’s latest efforts to move fast in naming and shaming crypto firms that fall foul of expanded rules. The FCA is updating its warning list of violators hourly as new infractions come to light, Lucy Castledine, the regulator’s director of consumer investments, told Bloomberg News in an interview before the new rules came into force.
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