British financial regulator FCA warns the public against using FTX

The British financial supervisory body issued a statement on its website on Friday, highlighting that the crypto exchange is not registered to provide financial services in the United Kingdom.

– This company is not authorized by us and targets people in the United Kingdom. You will not have access to the Financial Ombudsman Service, nor will you be protected by the Financial Services Compensation Scheme (FSCS), so it is unlikely that you will get your money back if things go wrong – the message states.

FCA oversees more than 50,000 financial firms in the UK to ensure they comply with regulations. It requires crypto-related companies to register and adhere to anti-money laundering regulations, including implementing KYC restrictions for customers.

The warning against the multi-million dollar company Sam Bankman-Fried is yet another example of the FCA’s alarm signaling in the digital asset sector. The regulator has been closely monitoring the space since digital assets surged in 2021, warning companies not to mislead marketing campaigns and banning the existence of bitcoin ATMs in the country.

The FCA is an example of one of several regulators that opposed Binance due to its regulatory practices last year, issuing a similar warning to FTX to send a message that the largest crypto exchanges pose a 'significant risk' to UK consumers. Binance has made several major changes in response to regulatory scrutiny, including the introduction of mandatory KYC restrictions and reducing the maximum leverage offering from 100x to 20x. 

Similar to Binance, FTX operates from an offshore jurisdiction. While both companies have U.S. subsidiaries that comply with the SEC and other U.S. regulators, their main entities offer a broader range of products and services that do not fall under U.S. laws.

FTX, based in Bahamima, received a license to operate in Cyprus this month but has yet to obtain a license to operate in the United Kingdom.

– Securing this license in the European Union is an important step in achieving our goal of becoming one of the most regulated exchanges in the world – Bankman-Fried stated at the time.