Britain’s financial regulator has warned consumers against dealing with FTX, the cryptocurrency exchange run by billionaire Sam Bankman-Fried, in the latest clash between UK authorities and offshore digital asset companies.
The Financial Conduct Authority said the Bahamas-based exchange appeared to be offering products and services in the UK without its authorisation, according to a statement on the regulator’s website.
“This company is not authorized by us and is targeting people in the UK,” the statement said.
The move against FTX, one of the biggest digital asset exchanges, comes after a fierce battle between the FCA and Binance as Britain steps up efforts to control the often unregulated world of cryptocurrencies.
The FCA intervened against Binance last year, saying its “complex and high-risk financial products” posed “a significant risk to consumers” and that the world’s largest crypto exchange had “failed” to answer some of its fundamental questions, making it impossible . to supervise the dispersed group.
Binance, one of FTX’s main rivals, has pledged to become fully compliant with regulation and reapply for UK oversight.
A spokesperson for FTX said it believed the regulator intended to warn consumers about a scam posing as an exchange because some of the phone numbers the regulator listed had been reported as linked to the scam.
However, the spokesman acknowledged that the website identified by the FCA – ftx.com – is the real website of the company. “We are looking into it and communicating with regulators,” FTX said. The FCA said in response: “It is important that we warn as quickly as possible [we] will provide updates if further information comes to light.”
Crypto exchange and wallet providers must register with the FCA for anti-money laundering oversight if their digital asset activity is “carried on as a business in the UK”, according to an FCA guide.
The FCA and other financial regulators around the world have faced a challenge trying to protect consumers and enforce standards in crypto markets, where many of the largest groups are based in offshore jurisdictions. Both FTX and Cayman Island-registered Binance have set up US affiliates to satisfy US authorities, but they offer services in other countries from their international base.
FTX’s European division announced this month that Cyprus’s financial regulator had granted it an investment company license, as the crypto firm pushes to expand across the continent. Bankman-Fried, FTX’s CEO, said at the time: “Securing this license in the EU is an important step in achieving our goal of becoming one of the most regulated exchanges in the world.”
The FCA said UK clients trading with FTX will not have access to UK consumer protections such as the Financial Ombudsman or the Financial Services Compensation Scheme and are unlikely to [their] money back if things go wrong”.