FCA Says FTX Operating in the UK Without Approval

The United Kingdom’s financial market watchdog, the Financial Conduct Authority (FCA), has raised an alarm against the popular crypto exchange, FTX, calling it an “unauthorized firm.”

“We believe this firm may be providing financial services or products in the UK without our authorization,” the FCA stated in the warning issued late last week. “This firm is not authorized by us and is targeting people in the UK.”

However, FTX seems to have suspended offering crypto derivatives services for retail clients in the United Kingdom in early 2021. That came with the FCA’s ban on the sale and distribution of cryptocurrency derivatives to retail traders.

“Commencing January 6, 2021, UK retail clients will no longer be eligible to trade crypto derivatives on FTX. UK retail customers may continue to hold and unwind positions after that date, but may not open new positions,” a notice on FTX’s website about UK client type reads. However, those rules were not imposed on professional clients.

Finance Magnates reached out to FTX to know its reactions to the FCA’s warning and will update this article accordingly.

FCA and Popular Crypto Exchanges

FTX, founded and headed by billionaire Sam Bankman-Fried, is one of the largest and growing crypto trading platforms. Its revenue in 2021 reportedly jumped by 1,000 percent to $1.02 billion. Even with the ongoing crypto winter, the exchange is expected to bring in $1.1 billion revenue in 2022 after ending the first quarter with $270 million.

Moreover, the British regulator warning came after FTX gained a license from the regulator in Cyprus that allows it to offer crypto derivatives across the European Economic Area. However, Britain’s exit from the EU kept FTX out of the country.

Meanwhile, the FCA’s warning against FTX was not the first alarm it raised against a crypto giant. Last year, it lashed out at Binance, which ended up pledging to become compliant in the country.

Earlier this year, the European unit of FTX, which is headquartered in Switzerland, revealed its plans to expand into the UK with regulatory approval.