The United Kingdom’s (UK) Financial Conduct Authority (FCA) has initiated a lawsuit against cryptocurrency exchange HTX, which is owned by controversial crypto investor Justin Sun, alleging violations of UK financial promotion regulations.
On Wednesday, the FCA announced that it had filed civil proceedings in London’s High Court against HTX, previously known as Huobi, for allegedly breaching Britain’s financial promotions regime. According to the FCA’s website, HTX is not authorized to operate within the UK.
HTX Remains On FCA’s Warning
A spokesperson for the FCA told Reuters the regulator’s commitment to protecting consumers and maintaining the integrity of the UK financial markets.
“We have seen crypto firms respond positively to our financial promotions rules and regulations. However, we will not hesitate to take action against firms that appear to breach our rules,” the spokesperson stated.
The legal filings name defendants including “persons unknown” who are currently managing promotions on behalf of HTX cryptocurrency exchange across various social media platforms.
Despite positive regulatory changes in the country following the US leadership in establishing a new framework for the growth and adoption of digital assets, HTX has been on the Financial Conduct Authority’s (FCA) warning list of unauthorized firms since October 2023. The FCA advises consumers against engaging with the exchange.
Notably, the FCA has accelerated crypto application approvals in an attempt to mull the US more favorable regulatory environment for cryptocurrencies and firms of the industry, with already five firms approved to operate in the country since April of this year.
Under UK law, firms marketing crypto asset services to consumers, including those based overseas, are required to register with the FCA in compliance with money-laundering regulations.
In October 2023, the Financial Conduct Authority introduced new rules governing the promotion of crypto assets, aligning their marketing with other types of financial promotions.
Justin Sun’s Latest Moves In Crypto
Founded in 2013 and registered in the Seychelles, HTX claims to have over 47 million registered users globally, with more than nine million identified as trading users, according to the company’s website.
Despite his controversial moves, which have recently included a key role in the Trump family’s crypto ventures, Justin Sun — a billionaire Chinese entrepreneur and the founder of the decentralized blockchain platform Tron (TRX) — acquired HTX in 2022.
Sun is a major supporter of President Donald Trump’s decentralized finance (DeFi) platform World Liberty Financial (WLFI), having invested approximately $90 million in Trump-related tokens.
Notably, a wallet labeled “SUN,” identified by blockchain analysts as belonging to HTX, has emerged as the top holder of President Trump’s official memecoin launched in January of this year.
Featured image from DALL-E, chart from TradingView.com
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