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FCA Sues Justin Sun-Linked Crypto Exchange HTX for Unlawful Promotions

Finance Magnates

Cryptocoins News / Finance Magnates 22 Views

The UK’s financial watchdog has sued crypto exchange HTX, alleging it unlawfully promoted digital asset services to British consumers. The move marks the latest step in the Financial Conduct Authority’s effort to bring global crypto operators under tighter oversight as the UK refines its digital asset rules.

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Regulator Moves to Enforce Crypto Advertising Rules

The FCA confirmed it had filed civil proceedings in London’s High Court against HTX, formerly known as Huobi, for violating Britain’s financial promotions regime, Bloomberg reported. The regulator said HTX was not authorized to operate in the country and appeared on its public warning list.

Founded in 2013, HTX lists Chinese entrepreneur Justin Sun as its global adviser. Sun, a long-time figure in the crypto sector, has drawn attention for his role in several ventures, including the Trump family’s crypto initiative, World Liberty Financial. Reports suggest he has invested around $75 million in the project’s tokens.

The UK’s Push for a Regulated Crypto Market

The case names Huobi Global alongside four unidentified individuals described as “persons unknown,” covering the exchange’s owners, operators, and heads of promotions.

In 2023, the UK’s Financial Conduct Authority (FCA)identified misleading advertisements as a major contributor to poor financial and investment decisions among consumers. In response, the regulator introduced stricter measures to ensure that financial promotions are accurate and present a fair balance between risk and reward for investors.

Read more: UK Romance Fraud Jumps 9% as False Affections Cost Investors £106 Million

Under this framework, only firms that can demonstrate sufficient expertise in the products they promote will be allowed to approve advertisements. Previously, any FCA-authorized firm could approve ads for unregulated companies, a practice that often led to unclear or deceptive promotions in retail trading.

The regulator reported this year that nearly 20,000 financial promotions were flagged last year, and subsequently withdrawn or amended, almost double the number recorded the previous year.

According to the agency, misleading promotions were most prevalent in sectors such as crypto assets, debt solutions, and claims management services. Of these, 9,197 promotions from claims management companies, primarily related to housing disrepair and motor finance claims targeting vulnerable consumers, were taken down.

This article was written by Jared Kirui at www.financemagnates.com.
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