The Financial Conduct Authority (FCA) of the United Kingdom has initiated legal proceedings against a cryptocurrency company for the first time by filing a civil lawsuit in the High Court against the exchange HTX (formerly known as Huobi). The platform is associated with Chinese-American billionaire Justin Sun, who serves as its advisor. The FCA accuses HTX of unlawfully promoting cryptocurrency services to British consumers, violating existing financial promotion regulations in the country.
This is reported by Business • Media
First Precedent in the Fight Against Illegal Cryptocurrency Activities
This lawsuit marks the first instance in the British regulator’s practice concerning cryptocurrency companies. The FCA emphasized that a significant portion of crypto platforms have adapted to new requirements; however, in cases of violations, the regulator is prepared to take decisive action. The cryptocurrency exchange HTX has already been placed on the FCA’s warning list as one of the companies attempting to attract British users without proper authorization.
“The FCA has initiated civil proceedings in the High Court against HTX, a global cryptocurrency exchange, for unlawfully promoting crypto asset services to British consumers in violation of the UK’s financial promotion regime. This action is part of our commitment to protecting consumers and maintaining the integrity of financial markets in the United Kingdom.”
Implications for the Crypto Market and HTX’s Position
As of October 2023, the FCA officially stated that HTX and KuCoin do not have permission to operate in the United Kingdom, urging consumers to avoid these platforms. According to legislation, companies dealing with crypto assets must register with the FCA and undergo checks to comply with anti-money laundering (AML) requirements and financial crime controls. HTX is not included in the list of nearly 50 companies that have received such registration.
Despite the regulator’s warnings and legal risks, HTX remains one of the leading cryptocurrency exchanges in the world. In May 2024, the platform surpassed Coinbase for the first time in daily spot trading volumes, reaching $2.15 billion, trailing only Binance, Bybit, and OKX. In February 2024, Justin Sun publicly confirmed that he holds over 28,613 BTC (over $1.6 billion) on HTX, demonstrating his confidence in the exchange.
The FCA emphasizes that the case against HTX serves as a clear signal to all participants in the crypto market regarding the necessity of adhering to financial standards and transparency in the digital asset sector in the United Kingdom.