Legal action against HTX for illegal crypto promotions in UK
The Financial Conduct Authority has begun legal proceedings against global crypto exchange HTX for illegally promoting cryptoasset services to UK consumers. This marks the first enforcement action against a crypto firm for such breaches since rules came into force in October 2023.
Persistent breaches despite warnings
The Financial Conduct Authority (FCA) has initiated legal action against global crypto exchange HTX for persistent illegal promotion of cryptoasset services to UK consumers.
Despite prior warnings, HTX continued to publish financial promotions on its website and across major social media platforms.
The firm operates with an opaque organizational structure, obscuring the identities of its owners and operators.
Repeated FCA engagement attempts were ignored.
To mitigate breaches, the FCA requested social media companies to block HTX's accounts for UK users and asked Google Play and Apple stores to remove HTX applications.
HTX has restricted new UK customer registrations, but existing users can still access unlawful promotions, with no assurance of permanent changes.
First enforcement under new regime
The FCA's rules, designed to protect consumers from unfair and misleading crypto marketing, came into force in October 2023. Since then, the majority of firms have positively engaged and complied with the new regime.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, stated that HTX's conduct 'stands in stark contrast' to compliant firms.
He highlighted this as the first enforcement action against a crypto firm for illegally marketing products to UK consumers.
Consumers dealing with HTX, which is on the FCA's Warning List, will not have access to the Financial Ombudsman Service for complaints and are unlikely to recover funds if the firm fails.
The FCA advises avoiding this and similar unauthorised firms.
A clear signal to rogue actors
This enforcement action sends an unequivocal message that the FCA will actively pursue non-compliant crypto firms.
While HTX's partial compliance is noted, the lack of permanence and continued access for existing users underscores the regulator's ongoing concerns.
The move reinforces the UK's commitment to consumer protection in the rapidly evolving crypto market.