Business News Report
October 09, 2023

Crypto Giants KuCoin and Huobi Under Scrutiny as UK Expands Warning List

In Brief

UK Financial Conduct Authority (FCA) has expanded its warning list to include major cryptocurrency exchanges, KuCoin and Huobi, due to concerns about improper marketing practices in the UK.

Crypto businesses in the UK are grappling with increasing regulatory requirements, including the ‘Travel Rule,’ which mandates the collection and sharing of information about crypto transfers.

While some global exchanges like Binance and OKX are adapting to comply with UK regulations, crypto businesses face the ongoing challenge of navigating diverse regulatory landscapes while staying compliant with evolving legal standards.

Crypto Giants KuCoin and Huobi Under Scrutiny as UK Expands Warning List

The UK Financial Conduct Authority (FCA) has expanded its warning list to include major cryptocurrency exchanges Huobi (HTX) and KuCoin, citing concerns about improper marketing in the UK. The FCA’s move comes as part of its efforts to enforce new financial promotion regulations that require crypto asset service providers to display clear risk warnings to UK-based consumers and adhere to higher technical standards, including a mandatory 24-hour cooling-off period for new customers.

In response to the FCA’s action, Huobi denied operating or marketing its services in the UK. Meanwhile, KuCoin expressed its commitment to adjusting its products and services to ensure compliance with relevant laws and regulations in each country.

Justin Sun, the crypto magnate overseeing Huobi, previously faced regulatory challenges when the US Securities and Exchange Commission accused him of fraudulent activities and market manipulation involving TRX, the primary cryptocurrency of the Tron blockchain.

Huobi has licenses for operations in various locations like Lithuania, Gibraltar, Dubai, Australia, the British Virgin Islands, and South America. Notably, the UK is not among the regions where it is explicitly prohibited.

Compliance Challenges for UK Crypto Businesses Amid Growing Regulations

The UK FCA’s warning list now includes 147 companies and penalties for non-compliance can range from takedown requests for websites and apps to unlimited fines and even prison time.

From September 1, crypto businesses in the UK are obligated to collect, verify, and share information about crypto transfers, referred to as the ‘Travel Rule.’ The regulation aligns with the Financial Action Task Force’s (FATF) call for global implementation of the Travel Rule, aiming to standardize practices across crypto businesses similar to businesses in traditional financial services. 

Meanwhile, major global cryptocurrency exchanges like Binance and OKX have announced their efforts to comply with the new financial promotion regulations in the UK, emphasizing transparency and consumer protection. Binance has launched a localized domain for UK users, while OKX has reduced its token offering and incorporated eye-catching risk warnings.

The changes will apply exclusively to retail users in the UK and exempt certain institutional and professional investors.

Compliance with the new rules remains a challenge for crypto businesses, as they must navigate varying regulations in different regions while ensuring that their services are aligned with the evolving legal landscape.

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Agne is a journalist who covers the latest trends and developments in the metaverse, AI, and Web3 industries for the Metaverse Post. Her passion for storytelling has led her to conduct numerous interviews with experts in these fields, always seeking to uncover exciting and engaging stories. Agne holds a Bachelor’s degree in literature and has an extensive background in writing about a wide range of topics including travel, art, and culture. She has also volunteered as an editor for the animal rights organization, where she helped raise awareness about animal welfare issues. Contact her on [email protected].

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Agne Cimerman
Agne Cimerman

Agne is a journalist who covers the latest trends and developments in the metaverse, AI, and Web3 industries for the Metaverse Post. Her passion for storytelling has led her to conduct numerous interviews with experts in these fields, always seeking to uncover exciting and engaging stories. Agne holds a Bachelor’s degree in literature and has an extensive background in writing about a wide range of topics including travel, art, and culture. She has also volunteered as an editor for the animal rights organization, where she helped raise awareness about animal welfare issues. Contact her on [email protected].

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