The Financial Conduct Authority (FCA) has launched formal legal proceedings against global crypto exchange HTX after concluding the firm repeatedly published illegal financial promotions in the UK.
Formerly known as Huobi, the firm offers trading in over 700 digital assets, including Bitcoin, Ethereum and its native token HT.
Under rules that came into force in October 2023, all firms marketing cryptoasset services to UK consumers must either be authorised by the FCA or ensure their promotions are approved by an FCA-authorised firm.
Advertising crypto products on social media or websites in breach of these requirements is a criminal offence.
The regulator said that despite repeated warnings, HTX continued to display financial promotions on platforms such as TikTok, Facebook, Instagram and YouTube, as well as its own website, without complying with the UK’s financial promotions regime.
The FCA added that its attempts to engage with HTX and secure a commitment to stop unlawful marketing were ignored, claiming the firm operates through an “opaque” organisational structure that hides the identities of its owners and website operators.
To protect consumers, the regulator has also asked major tech platforms to block HTX’s social media accounts and to remove the company’s apps from the Google Play and Apple App Stores for UK-based users.
HTX is currently on the FCA’s Warning List, a public register of firms that are operating without proper authorisation in the UK.
Consumers dealing with firms on this list do not have access to the Financial Ombudsman Service, and are unlikely to recover their money if the firm fails.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, said that its 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,” he added. “This is the first time we’ve taken enforcement action against a crypto firm illegally marketing their products to UK consumers and we’ll continue to act against firms who ignore our rules.”
