FCA Sues HTX Over Alleged Breach of Financial Promotion Rules
In a significant development, the United Kingdom’s Financial Conduct Authority (FCA) has taken legal action against HTX, a cryptocurrency exchange owned by the well-known crypto investor Justin Sun. The FCA accuses HTX of violating UK financial promotion regulations, marking a notable case in the ongoing regulation of digital asset platforms.
FCA’s Legal Action Against HTX
On a recent Wednesday, the FCA announced it had initiated civil proceedings in London’s High Court against HTX, formerly known as Huobi. The case centers around allegations that the exchange has not adhered to Britain’s stringent financial promotions regime. As per the FCA’s website, HTX lacks the necessary authorization to operate within the UK’s regulatory framework.
Advertisement Banner
HTX Under FCA’s Scrutiny
A spokesperson from the FCA emphasized the agency’s dedication to safeguarding consumers and ensuring the integrity of the UK financial markets. “We have observed positive compliance from some crypto firms concerning our financial promotions rules. Nevertheless, we will not hesitate to take action against entities that appear to contravene our regulations,” the spokesperson conveyed to Reuters.
The court documents identify multiple defendants, including “persons unknown,” who are purportedly involved in promoting HTX on various social media platforms. Despite regulatory efforts in the UK to foster a conducive environment for digital assets, HTX has remained on the FCA’s warning list of unauthorized firms since October 2023. The FCA strongly advises consumers against interacting with the exchange.
Interestingly, the FCA has been expediting crypto application approvals to counterbalance the more favorable regulatory atmosphere in the US for cryptocurrencies. Since April of this year, five firms have successfully gained approval to operate within the UK.
Regulatory Requirements for Crypto Firms
Under UK legislation, companies offering crypto asset services to consumers, including those based abroad, must register with the FCA and adhere to anti-money laundering regulations. In October 2023, the FCA introduced new guidelines for promoting crypto assets, aligning these marketing efforts with other financial promotions to ensure consistency and consumer protection.
Justin Sun’s Influence in the Crypto World
HTX, established in 2013 and headquartered in the Seychelles, claims a vast user base of over 47 million registered users worldwide, with more than nine million actively engaged in trading, according to its official website. Despite controversies, Justin Sun—an influential Chinese entrepreneur and the visionary behind the decentralized blockchain platform Tron (TRX)—acquired HTX in 2022.
Sun’s ventures extend beyond HTX; he is a prominent backer of President Donald Trump’s decentralized finance (DeFi) initiative, World Liberty Financial (WLFI), investing approximately $90 million in tokens associated with Trump. Notably, a blockchain wallet identified as belonging to HTX has emerged as the leading holder of President Trump’s official memecoin, introduced in January of this year.
The cryptocurrency market continues to be dynamic, with the total market capitalization reaching $3.62 trillion, as depicted in recent data from TradingView.com.
Our Editorial Commitment
At bitcoinist, our editorial process is focused on delivering thoroughly researched, precise, and unbiased content. We adhere to rigorous sourcing standards, and each article undergoes meticulous review by our team of top technology experts and seasoned editors. This process is designed to guarantee the integrity, relevance, and value of our content for our readership.
“`
