Britain’s financial regulator has warned consumers against trading with FTX, the cryptocurrency exchange run by billionaire Sam Bankman-Fried, in the latest clash between UK authorities and offshore digital asset firms.
The Financial Conduct Authority said the Bahamas-based exchange appeared to offer products and services in the UK without its permission, according to a statement posted on the regulator’s website.
“This business is not authorized by us and targets people in the UK,” the statement said. FTX did not immediately respond to a request for comment.
The decision against FTX, one of the largest digital asset exchanges, comes after a deadly battle between the FCA and Binance as the UK steps up its efforts to control the often unregulated world of cryptocurrencies.
The FCA intervened against Binance last year, saying its “complex and high-risk financial products” pose “significant risk to consumers” and that the world’s largest crypto exchange had “failed” to respond to some of his basic queries, making it impossible to monitor the sprawling group.
Binance, one of FTX’s main rivals, has pledged to fully comply with the regulations and re-apply for supervision in the UK.
Crypto exchange and wallet providers must register with the FCA for anti-money laundering oversight if their digital asset business is ‘conducted through a business in the UK’, guide says of the FCA.
The FCA and other financial regulators around the world have faced a challenge trying to protect consumers and impose standards in crypto markets, where many of the biggest groups are based in offshore jurisdictions. FTX and Binance, registered in the Cayman Islands, set up US subsidiaries to appease US authorities, but offer services in other countries from their international base.
FTX’s European division announced this month that it has been granted an investment firm license by the Cypriot financial regulator, as the crypto firm strives to expand on the continent. Bankman-Fried, Managing Director of FTX, said at the time: “Obtaining this license in the European Union is an important step in achieving our goal of becoming one of the most regulated exchanges in the world. “.
The FCA said UK customers dealing with FTX would not have access to UK consumer protections such as the Financial Ombudsman or the Financial Services Compensation Scheme and would be “unlikely to get [their] reimbursement if things go wrong”.