UK's FCA Takes Aim At Crypto Exchanges: Why Huobi And KuCoin Are Facing Scrutiny

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, Bloomberg reported.

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

From Oct. 8, the U.K. expanded its financial promotion regulations to encompass all cryptoasset 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.
The FCA's cautionary note for both Huobi and KuCoin, 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.”

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, told Bloomberg that the exchange “does not operate or market its services or products in the UK.”

Also Read: People Are Going To Start Cashing Out Bitcoin — Here's Why

On the other hand, KuCoin CEO Johnny Lyu conveyed via email that while KuCoin doesn't function in the UK, it remains dedicated to "ensuring compliance with relevant laws and regulations in each country to the extent possible."

Earlier this year, the U.S. Securities and Exchange Commission accused Tron TRON/USD founder Justin Sun of deceptive practices and market manipulation linked to TRX, Tron blockchain's native cryptocurrency.

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.

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