FCA Issues Warning About Unregistered Crypto Exchange FTX

The FCA’s Latest Warning: What You Need to Know

The Financial Conduct Authority (FCA), the UK’s head honcho for financial regulations, is sounding the alarm on the Bahamas-based crypto exchange, FTX. Their warning, delivered on September 16, accuses the exchange of operating without the necessary authorization in the UK. If you’re thinking of putting your hard-earned cash into FTX, the FCA’s message is clear: buyer beware!

The Growing List of Unregistered Crypto Businesses

FTX isn’t alone in this uncharted territory. In fact, it’s part of an ever-expanding lineup of unauthorized cryptocurrency firms that outnumber those playing by the rules. As of late August, only 37 crypto companies were registered with the FCA, and names like Crypto.com have only recently made the cut.

The Risks of Dealing with Unregistered Exchanges

For potential investors, the risks are substantial. The FCA warns that if things go south while dealing with unregistered firms like FTX, you won’t be able to get your money back. Moreover, you’ll miss out on the Financial Services Compensation Scheme, which means you’re essentially on your own if the wheels fall off.

Understanding FCA’s Registration Process

The FCA put on its big regulation pants back in January 2020, launching new rules to monitor crypto businesses and enforce compliance with Anti-Money Laundering and Counter-Terrorist Financing measures. The goal? To ensure that firms meet a standard that helps prevent financial crimes. The reality is that many crypto firms are tripping over these hurdles, resulting in a slew of rejections.

Consequences of Non-Compliance

So, what happens to these unregistered entities? While the FCA isn’t about to hand out gold stars for effort, the repercussions are still murky. Remember the case of ePayments? After being cited for weaknesses in financial crime controls, they were shut down, leaving consumers scrambling. If the FCA’s track record is any indication, FTX might want to rethink its next moves.

Regulatory Attention on FTX

And just when you thought FTX could get a breather, they found themselves in hot water with the Federal Deposit Insurance Corporation (FDIC). Back in August, the FDIC issued a cease and desist letter to FTX, accusing it of misleading the public about certain crypto products, claiming they were insured by the FDIC. It looks like this exchange is attracting more attention than a cat video at a family gathering.