FCA tightens the noose around crypto exchange FTX. Here’s why

Highlights

• The FCA, on 19 September, sent notice to FTX stating that the exchange would not be permitted to operate in the UK.
• The financial watchdog highlighted that the exchange offers services in the country without proper authorization.

After UK’s Financial Conduct Authority (FCA) banned the world’s leading crypto exchange, Binance, last year, another exchange is in the dock. The FCA, on 19 September, sent notice to FTX stating that the exchange would not be permitted to provide services to the customers in the country.

The financial watchdog warned the FTX’s customers that henceforth it would be unable to access traditional consumer protections or receive compensations in case of loss. In the official notice, FCA highlighted that the exchange offers services in the country without proper authorization.

All crypto firms are supposed to obtain proper licenses before operating the country. Earlier this year, FCA issued March as the deadline for registering with the financial watchdog. It was further stretched, leading to few crypto businesses getting part-time registrations.   

Crypto.com gets a license to operate in the UK

FTX’s ruling comes amid Crypto.com managing to secure its crypto service approval in the UK. The Singapore-based exchange on 17 August received registration approval as Cryptoasset Business in the UK.

The registration may allow the exchange gain grounds over its peers as it will now be able to offer products and services to customers in the UK. This must be a significant relief to the exchange, considering it had been under the radar due to its recent celebrity endorsements earlier this year.

Crypto.com has been on a roll getting into newer markets. Only last month, Crypto.com managed to secure approval from the Ontario Securities Commission and become the service provider in South Korea. Besides, it has already managed to get the nod to develop its footprints in Italy, following approval from the Italian watchdog Organismo Agenti e Mediatori (OAM).

FCA’s tougher stance

The FCA has been taking a tougher stance against crypto businesses. The FCA wants to ensure that all crypto businesses to adhere to the AML and anti-terror financing rules.

Increased regulatory scrutiny has weighed on the crypto market especially post the Terra Luna collapse. Today, regulatory bodies around the globe are putting their weight behind the urgent need for proper regulatory mechanisms to protect consumers and ensure that they don’t end up losing their money due to a scam or in case of a market collapse. 

It must be understood that cryptocurrencies are a risker asset, and its prices and performance can change at any given time; therefore, as an investor, one must do the necessary research before making critical investment decisions.

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