FTX, a major cryptocurrency exchange operating internationally has recently been dealt a low blow by the UK regulatory authority. The Financial Conduct Authority (FCA) in the United Kingdom has dropped a huge bomb of concern and high risk over the investors in the United Kingdom.
FCA Enlists FTX as Unregistered Entity
The FCA has reportedly issued a warning against FTX, where it has intimated the UK locals about the exchange. According to the regulatory authority, the exchange is operating without authorization in the country.
According to the regulatory authority, any exchange aiming to operate and offer cryptocurrencies in the country needs to have a proper license.
The exchange has acquired no license from the Financial Conduct Authority to operate in the country. It is the FCA that grants authorization to cryptocurrency exchanges to operate their business in the country.
As the exchange has acquired no such license, it is not registered by the FCA to operate in the United Kingdom, making it a risky investment to operate.
Warning Issued on September 16
According to data, the regulatory authority added FTX to the list of unregistered cryptocurrency exchanges operating in the country.
FTX is now on the list of cryptocurrency exchanges that are unauthorized and unlicensed to operate in the United Kingdom.
The FCA has announced that all the financial services and products being offered by the exchange are unauthorized in the United Kingdom. Therefore, the investors interacting with the exchange are at risk of losing their funds.
If the exchange ends up defrauding them or goes off the radar with their funds, they will not be able to recover them. The FCA has no compensation plan or program in order for investors who end up losing funds to unauthorized platforms in the United Kingdom.
The FCA Updated the List
By the end of August when the Financial Conduct Authority had updated multiple major cryptocurrency exchanges on the warning list. However, Crypto.com was the most popular cryptocurrency exchange on the list at that time.
The FCA also updated the list of registered cryptocurrency exchanges and other online trading brokerages operating in the United Kingdom.
Among the platforms related to crypto that is authorized to operate in the UK are Wintermute Trading LTD, Rubicon Digital UK Limited, and Uphold Europe Limited.
Some of the major names licensed to operate in the UK include Zodia Markets (UK) Limited, DRW Global Markets LTD, and eToro UK.
The latest warning issued by the FCA against FTX is a major negative for the exchange. The exchange has a strong user base in the country and with the latest announcement, it will have many investors leaving.
This may result in mass liquidity in the cryptocurrency industry. The daily trading volume on FTX is worth $3.187 billion. With UK-based users contributing at a larger level to the daily trading volume, their leaving the exchange can cause a major downfall in the crypto-verse.
James Thompson