- Crypto exchanges Kucoin and Huobi have been listed in FCA’s warning list
- This addition will take away two key rights from those using these two platforms
The United Kingdom’s Financial Conduct Authority (FCA) has updated its warning list comprising of companies that are operating without permission. The list contains two notable crypto exchanges – HTX, formerly known as Huobi, and Kucoin. The exchanges were added to the list on October 8, 2023, with the financial regulatory authority advising users to “avoid dealing with this firm”.
Realistic or not, here’s HT’s market cap in BTC terms
What does this mean for crypto users?
With these exchanges added to the list, customers of this crypto platform will not be able to access the Financial Ombudsman Service. It is a free service that settles complaints between customers and financial service providers. This would mean that any financial complaint against HTX and Kucoin would not be admissible.
Additionally, customers would also have no right to be protected under the Financial Services Compensation Scheme (FSCE). This UK government-introduced scheme compensates customers who’ve lost money because of the collapse of a financial firm. The scheme even provides 100% compensation when claimed directly.
In the time of crisis for Kucoin and HTX, UK-based customers would not be eligible for any financial claims under this scheme.
New crypto rules go into effect in the UK
The new rules set by the UK FCA for crypto firms have gone into effect starting this week. The new rules mandate that all crypto firms are required to be registered with the financial authority. Additionally, the rule also requires crypto firms to have their advertising approved by an FCA-authorized firm.
The rule further states, “In response to industry readiness it (FCA) will consider giving cryptoasset firms more time to implement certain changes, for instance, a 24-hour cooling off period.” Moreover, the marketing schemes must be “clear, fair, and not misleading” and should carry risk warnings. Crypto firms are also not allowed to “inappropriately incentivize people to invest” under this new marketing law.
The press release further read,
“Firms must first apply for the flexibility which would then allow them time to make the required back-office changes successfully. The rules and the approach to implementation are aligned with the approach taken last year when the FCA introduced rules for marketing other high-risk investments. “
Most crypto firms in the UK have already adopted the new changes. Financial service providers – Revolut, and crypto exchanges – Binance and Coinbase were among the firms that notified customers of the upcoming changes via email over the weekend.
