The British financial market regulator was not idle over the weekend, adding 143 new entities to its warning list, primarily from the cryptocurrency sector. Notably, the updated Financial Conduct Authority (FCA) list includes well-known brands such as the cryptocurrency exchanges KuCoin and Huobi. The move is deliberate, as new cryptocurrency regulations came into effect in the country on October 8th.
FCA Updates Warning List, Adds Huobi and KuCoin
In the case of both Huobi and KuCoin, two cryptocurrency exchanges originating from Asia,the FCA warning message is the same: "This firm may be promoting financial services or products without our permission. You should avoid dealing with this firm."
The FCA emphasizes that in order to promote cryptocurrency services or any other services in the United Kingdom, a special authorization issued by the British Supervisory Commission is required. The inclusion of these two exchanges on the warning list indicates that Huobi and KuCoin lack such authorization.
@kucoincom and @HuobiGlobal were included on the @TheFCA 's warning list this weekend, along with over 140 other entities. pic.twitter.com/vWNZuucnCy
— Damian Chmiel (@ChmielDk) October 9, 2023
There are many cryptocurrency exchanges worldwide; however, according to current FCA data, only 42 entities are registered as crypto asset providers in the UK. Moreover, since the beginning of 2020, the regulator has approved only 13% of over 290 applications for such authorization.
Implementation of New Cryptocurrency Regulations
October 8 marked the day of the activation of the UK's revised financial promotions framework for digital assets. The UK government has put into effect new laws aimed at regulating how crypto assets are promoted to the public, focusing on shielding UK residents from risky investments without sufficient knowledge. This updated framework will be applicable to all companies that market digital assets in the UK, even those headquartered outside the country.
At the end of September, the FCA issued reminders about the upcoming deadline, noting that numerous firms had yet to comply with the new regulations.
In addition,the FCA released data about financial promotions for the second quarter, spanning April to June 2023. According to the data, regulatory actions led to 1,507 promotions being altered or withdrawn by companies under the FCA's oversight. In addition, 400 warnings were issued to firms and individuals operating in the UK without the required authorization, 11% of which were alerts about cloned companies.
Despite these warnings, many companies had ample opportunity to adapt to the changes. The FCA initially made the announcements in January 2022. Then, in February 2023, the UK government published a document outlining the specifics. Concurrently, the FCA evaluated companies' preparedness for the new regulations set to take effect in October, offering assistance where needed.
After Finance Magnates' initial release, the FCA published a press release regarding the latest warning. "We issued 143 alerts about cryptoasset promotions on the first day of the new regime. We expect businesses including social media platforms, app stores, search engines, domain name registrars and payments firms to consider the alerts we have issued and play their part in protecting UK consumers from illegal promotions," the FCA commented.
This article was written by Damian Chmiel at www.financemagnates.com.
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