Regulators still don’t see eye-to-eye with the cryptocurrency industry. The FCA has warned consumers to avoid the FTX exchange and trading platform in the United Kingdom. The company allegedly operates without authorization or approval in the country.
FTX Is Under Scrutiny In The UK
Cryptocurrency exchanges and trading platforms are a crucial gateway into the world of Bitcoin and Ethereum. They make it easy for consumers to buy, sell, and trade cryptocurrencies and fiat currencies. FTX is one of the biggest household industry names, along with Coinbase and Binance. However, the company provides products and services to UK customers without the necessary approval and authorization from the FCA.
More specifically, FTX holds a European trading license. It acquired that license in Cyprus in March of 2022, allowing it to operate across the entire European Union. The United Kingdom is, since Brexit, no longer part of the EU and requires an additional license. The FCA argues FTX should pursue that regulatory approval before providing services to Britons, although there is no intent to prevent the exchange from doing so.
In a statement, the FCA states:
“This firm is not authorized by us and is targeting people in the UK. You will not have access to the Financial Ombudsman Service or be protected by the Financial Services Compensation Scheme (FSCS), so you are unlikely to get your money back if things go wrong.”
Applying for FCA approval can be a time-consuming and costly process. However, FTX secured $400 million in Series C funding in January 2022. Most of that money has gone toward securing more licenses and investing in or acquiring other crypto players, including Coinfeeds and BlockFi. FTX also holds a stake in Robinhood and Dave, allowing it to tap into a vast network of experts and consumers. However, it still needs to get that FCA approval, preferably sooner rather than later.
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