UK’s Financial Conduct Authority (FCA) has taken legal action against crypto exchange HTX for illegal promotions to UK-based users.
FCA Has Started Legal Proceedings Against Crypto Exchange HTX
The FCA, UK’s financial watchdog, has begun legal proceedings against HTX, as revealed in a press release on the regulator’s website. The reason for the action is the crypto exchange not complying with FCA’s digital asset promotion rules. “Firms providing crypto products to UK consumers need to comply with rules which protect consumers from unfair and misleading marketing,” noted the regulator.
The rules first came into effect back in October 2023 and since then, the majority of firms that FCA has engaged with have responded positively in complying with the regime. FCA previously served a warning to HTX for illegally promoting services to UK consumers, but unlike other companies, the exchange continued to push financial promotions on its website and social media platforms.
“HTX’s conduct stands in stark contrast to the majority of firms working to comply with the FCA’s regime,” said Steve Smart, joint executive director of enforcement and market oversight at the FCA.
Formerly known as Huobi, HTX is a crypto exchange founded in China that now operates offices in various countries. The FCA has described the platform’s organizational structure as ‘opaque,’ with the identities of the owners and website operators remaining unknown, and repeated attempts by the regulator to engage with the firm ignored.
Following the initiation of the proceedings by FCA, HTX has restricted new accounts from users based in the UK. The crypto platform hasn’t stopped existing users from logging in, however, and has also not given any assurance that the changes are permanent, leaving the regulator concerned that the risk of ongoing breaches continues.
“This is the first time we’ve taken enforcement action against a crypto firm illegally marketing their products to UK consumers,” noted Smart. Alongside the legal action, the FCA has requested Google Play and Apple stores to drop HTX’s applications in the UK. The regulator has also asked social media platforms to block the exchange’s accounts to UK-based users.
Although the ownership structure of HTX is hidden, a name that has publicly been associated with the crypto exchange is billionaire Justin Sun, who serves as a global advisor. Sun’s name, however, doesn’t appear in FCA’s lawsuit.
In some other news, Coinbase Advanced witnessed net outflows of stablecoins earlier, as highlighted by CryptoQuant author Darkfrost in an X post. Stablecoins are digital assets that have their price pegged to a fiat currency. Generally, investors withdraw into these tokens when they want to avoid the volatility associated with cryptos like Bitcoin, so exchange outflows related to stablecoins can be a sign that traders are retreating from the market.
The trend in the stablecoin Coinbase netflow | Source: @Darkfost_Coc on X
From the chart, it’s visible that recently the trend has started to reverse, with stablecoins flowing into Coinbase Advanced once more, a potential sign that US-based whales are becoming interested in swapping into the volatile side once more.
Bitcoin Price
At the time of writing, Bitcoin is trading around $68,700, down 6% over the last week.
The price of the coin seems to have been moving sideways over the last few days | Source: BTCUSDT on TradingView
Featured image from Dall-E, chart from TradingView.com
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