The Financial Conduct Authority (FCA) has begun legal proceedings
against global crypto exchange HTX (formerly Huobi) for illegally
promoting cryptoasset services to UK consumers.
Access documents on this
claim on the FCA website.
Firms providing crypto products to UK consumers need to comply
with rules which protect consumers from unfair and misleading
marketing. Advertising cryptoassets on social media or websites
without complying with these rules is a criminal offence.
Since the rules came into force in October 2023, the FCA has
engaged extensively with firms, and the majority have reacted
positively in complying with the new regime.
The FCA previously warned about HTX's illegal promotion of crypto
services to UK consumers. However, it has continued to publish
financial promotions in breach of these rules on its website and
on social media platforms, including TikTok, X, Facebook,
Instagram and YouTube.
HTX operates an opaque organisational structure, hiding the
identities of its owners and the operators of its website.
Repeated attempts by the FCA to engage with HTX have been
ignored. Since issue of the proceedings, HTX has taken steps to
restrict new UK customers from registering an account. However,
existing UK users can still log in and access unlawful financial
promotions, and HTX has given no assurance that the changes will
be permanent. The FCA therefore remains concerned that the risk
of ongoing breaches continues.
Steve Smart, joint executive director of enforcement and market
oversight at the FCA, said: “Our rules are designed to support a
sustainable and competitive crypto market in the UK, ensuring
that consumers have what they need to make informed decisions.
“HTX's conduct stands in stark contrast to the majority of firms
working to comply with the FCA's regime. This is the first time
we've taken enforcement action against a crypto firm illegally
marketing their products to UK consumers. We'll continue to act
against firms who ignore our rules.”
To protect consumers, the FCA requested social media companies
block HTX's social media accounts to UK-based consumers and
requested the removal of HTX applications from the Google Play
and Apple stores in the UK.
HTX is currently on the FCA's Warning List.
Consumers dealing with this firm won't have access to
the Financial
Ombudsman Service if they have a complaint.
Consumers are unlikely to get their money back if it goes out of
business and should avoid dealing with this, or similar
unauthorised firms.
Individuals can check the FCA's Warning List to see if a firm is
operating illegally and visit the FCA's cryptoasset promotions
page for more information on how to protect themselves.
Notes to editors
- The FCA enables a fair and
thriving financial services market for the good of consumers and
the economy.
- Our strategy
2025-2030 prioritises fighting financial crime. Over
the last 2 years, the FCA has charged more people with criminal
offences and is concluding enforcement investigations faster.
- Following legislation passed by Parliament, cryptoassets were
brought within scope of the FCA's financial promotions regime.
- From October 2023, all cryptoasset firms marketing to UK
consumers, including firms based overseas, must comply with the
regime.
- The FCA has been clear that those who fail to play by the
rules risk being placed on the FCA warning list, being subject to
website take down requests or facing criminal or civil
enforcement action.
