Huobi and KuCoin, along with several other digital asset companies, were recently included in the UK Financial Conduct Authority’s warning list for promoting their services within the UK without the necessary approvals. The regulatory authority is intensifying its oversight of the crypto industry.
Starting from October 8, the UK’s regulations regarding financial promotions were expanded to encompass cryptoasset service providers, irrespective of their geographic location. Consequently, all crypto platforms must now display explicit risk warnings to consumers based in the UK and adhere to higher technical standards. These standards include implementing a mandatory 24-hour cooling-off period for new customers.
The FCA issued a general warning regarding Huobi and KuCoin, stating, “This firm may be promoting financial services or products without our permission. You should avoid dealing with this firm.” Both companies were among the 147 entities added to the FCA’s watchlist. Non-compliance with these regulations may result in penalties such as website and app takedown requests, substantial fines, and even legal consequences.
A spokesperson for Huobi, also known as HTX, stated that the company does not offer or market its services or products within the UK. Although KuCoin does not operate in the UK, the firm’s CEO, Johnny Lyu, expressed a commitment to adjusting its offerings to ensure compliance with the laws and regulations of various countries.
Justin Sun, the entrepreneur behind Huobi, has faced regulatory challenges in the past, with the US Securities and Exchange Commission accusing him of fraud and market manipulation involving TRX, the native cryptocurrency of the Tron blockchain. Huobi claims to hold licenses for operation in various locations, including Lithuania, Gibraltar, Dubai, Australia, the British Virgin Islands, and South America but notably does not mention the UK as an authorized location.
KuCoin, based in Seychelles, restricts its platform to several countries, including the US, Singapore, Hong Kong, mainland China, Thailand, Malaysia, and Ontario, Canada. The UK is not explicitly listed among the restricted locations in their policy.
These recent warnings are part of the UK’s proactive measures to promptly identify and publicly name crypto firms that do not comply with the expanded regulations. The FCA is continuously updating its list of non-compliant entities as new infractions come to its attention, as stated by Lucy Castledine, the director of consumer investments at the regulatory authority before the new rules were implemented.