Crypto giants Huobi and KuCoin have landed on the regulator’s radar, cited for marketing their crypto services in the UK without the requisite approvals.
However, the warning wasn’t just limited to these prominent exchanges as 147 other companies were listed in the latest cautionary note. Non-compliance penalties are steep, ranging from website takedowns and unlimited fines to potential jail time, the FCA warned.
The notice comes as the UK has expanded its rules on financial promotions to include cryptoasset service providers, regardless of their location. These platforms are now required to display clear risk warnings to UK consumers and adhere to higher technical standards, including implementing a 24-hour cooling-off period for new customers. This pause allows investors to take a step back and reconsider their decision before proceeding with this type of risky investment. Additionally, the practice of offering ‘refer a friend’ bonuses is now prohibited.
These new regulations will extend to crypto companies and impact their ability to engage with local customers, requiring them to be registered or authorized by the FCA when reaching out to U.K. clients. Some firms, like Luno and PayPal, have already adjusted their crypto operations in response to these changes.
The new regulations also require firms promoting crypto products or services to include a clear risk warning in their promotions and verify that individuals have the necessary knowledge and experience to invest in cryptocurrencies.
In response to their addition to the FCA’s warning list, officials from Huobi stated that they neither operate nor market their services in the UK. Huobi’s representatives mentioned, “We are dedicated to adjusting our products and services to ensure alignment with the relevant laws and regulations in each country to the fullest extent.” The company went on to list licensed operation locations, including Lithuania, Gibraltar, Dubai, Australia, the British Virgin Islands, and South America. Notably, the UK is not mentioned as a restricted area on their official website.
KuCoin, based out of Seychelles, also shed light on its operational boundaries. The exchange shared that its platform is limited in several jurisdictions: the US, Singapore, Hong Kong, mainland China, Thailand, Malaysia, and Ontario, Canada. Just like Huobi, KuCoin’s list of restricted territories does not currently include the UK.
