The Financial Conduct Authority, which is a top financial regulator in the United Kingdom, has made claims that the cryptocurrency platform FTX is not eligible to offer products and services to residents in this country. This news has been a subject of major concern among investors in the UK lately, so we are going to discuss every prominent factor leading the FCA to make such a definite statement.
Importance of Regulated FCA Brokers
It goes without saying that every trader should look for regulated brokers. The reason is pretty clear – the regulatory body means that you have reliable insurance in case some kind of unlawful behavior occurs on the broker’s end. What’s more, you are no longer worried about the safety of your funds on regulated platforms as you will always have the possibility to get them back if the broker decides to scam you.
The financial conduct authority is one of the top regulators in the United Kingdom, whose primary goal is to ensure every business is regulated here. If you want to check out UK Forex brokers regulated by the FCA, there are various websites offering this kind of information. All in all, the first thing you have to do upon entering the broker’s website includes checking its legitimacy and seeing whether it is regulated by top companies. In case there is not any information presented in regard to this topic, we strongly suggest refraining from registering on the web page as there are substantial risks of being deceived and scammed.
FCA stands for financial conduct authority which is a financial regulatory body in the United Kingdom. The main objective of this organization is to protect consumers, promote healthy competition among financial services providers, and retain a stable industry. It is worth noting that despite residing in the UK, it is not entirely dependent on this government and members of the financial service industry are responsible for financing it with the help of fees. Every major financial firm is regulated by the financial conduct authority in the UK.
As for FTX, as we have mentioned above, it is a cryptocurrency platform headquartered in the Bahamas. It is a centralized exchange operating mainly in derivatives and leveraged products, and you will come across the most commonly traded digital coins there. As of today, the daily trading volume is more than 10 billion dollars on this platform and there are over 1 million registered users. The main goal of FTX was to establish a charitable exchange that would follow the principle of earning to give, and so far, it has served this purpose perfectly.
Why FCA Issued Consumer Warning Against FTX
As we read in the announcement made by the FCA officials, nearly every company and individual who is willing to provide financial services or products to UK citizens should be authorized and registered by them. Thus, the main reason why they have accused FTX and warned its customers is that this exchange is not regulated by the financial conduct authority.
What’s more, the regulators have made further accusations that this crypto platform is targeting UK residents and trying to steal their money. They have warned investors that it is pretty much impossible to get back lost funds on this exchange. Also, the FCA added that even the ombudsman of the country will not be able to provide assistance in case users will lose a lot of money.
The financial conduct authority has always been strict toward digital asset companies and demanded they meet specific anti-money laundering standards. Otherwise, they will not be able to undertake any regulated activity in the United Kingdom. Also, if consumers will be engaged in unregulated business activities and lose a lot of money, the Financial Services Compensation Scheme (FSCS) will not protect them.
Due to this very reason, popular exchanges such as CryptoCom and Kraken have decided to get a license from the FCA in order to retain their activities in this country. As a result, the FCA itself has provided a green light for them. However, Binance Market was not allowed to operate in the UK at some point and was ordered to stop offering derivative products there. Therefore, Binance carries out necessary measures in the upcoming months to meet every essential requirement of the FCA to obtain regulatory approval. As a result, this issue was resolved and Binance finally started operating in the United Kingdom.
Hence, as long as FTX remains without regulatory approval of the financial conduct authority, it will be prohibited from carrying out any activity in this country. So, UK customers of this exchange should be careful, since there are considerable risks of losing all your funds without any prospects of getting them back. It is not entirely clear what the future holds, but now everything is dependent on the actions of FTX officials.