By Kirstin Ridley and Elizabeth Howcroft
LONDON, Feb 10 – Britain’s Financial Conduct Authority said on Tuesday it had asked social media companies and app stores to block access to crypto exchange HTX in the UK, stepping up efforts to prevent the group from promoting “illegal” crypto asset services.
The regulator, which filed a London High Court lawsuit against HTX last October, said it wanted Alphabet’s Google and Apple to remove HTX products from UK app stores and HTX’s social media accounts for UK-based consumers blocked.
Regulators and authorities around the world have for years warned that nascent crypto markets – which are generally less regulated than mainstream financial markets – present risks to investors. The FCA enforcement action is its first against a crypto firm illegally marketing its products to UK consumers.
HTX, formerly known as Huobi, did not respond to a request for comment.
HTX CONDUCT IN ‘STARK CONTRAST’ TO OTHER FIRMS, FCA SAYS
Under UK rules, crypto companies that wish to attract British customers have to register with the FCA and submit to anti-money laundering and financial crime checks.
But HTX and Huobi are named on an FCA list of unauthorised companies designed to warn consumers against dealing with them.
The company had repeatedly advertised illegal crypto promotions to British consumers on social media platforms such as TikTok, X, Facebook, Instagram and YouTube, the regulator said.
Examples cited by the FCA include a page of HTX’s website with tutorials on how to trade on the HTX Exchange, saying “buy Bitcoin in a minute” and “learn spot trading in seconds”.
The FCA also cited a description of crypto loans on HTX’s website accompanied by a flame emoji and the phrases “borrow and repay any time for flexible trading” and “borrow to scale up your trades and profits”.
“HTX’s conduct stands in stark contrast to the majority of firms working to comply with the FCA’s regime,” said Steve Smart, the FCA’s joint head of enforcement and market oversight.
The regulator said HTX had taken steps to prevent new UK customers from registering accounts, but that existing UK users could still access unlawful financial promotions.
The FCA said HTX, which had an “opaque organisational structure”, had ignored repeated regulatory attempts to engage. Its lawsuit is filed against Panama-incorporated Huobi Global and “persons unknown”.
Nick Barnard, a partner at law firm Corker Binning, said the case illustrated the “near impossibility” of regulating the crypto asset industry from one jurisdiction, given FCA was unable to take direct action in the absence of any physical HTX presence in the UK.
“However, the FCA has likely decided that it must at least be seen to be taking a stand against those who blatantly flout the rules,” he said.
HTX was founded in 2013 and names Chinese crypto entrepreneur Justin Sun as a global adviser. Sun was not named in the lawsuit.
(Reporting by Kirstin Ridley and Elizabeth Howcroft, additional reporting by Muvija M.; Editing by Bernadette Baum and Tomasz Janowski)
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