The Financial Conduct Authority (FCA) in the United Kingdom has included Poloniex, a crypto exchange, in its list of non-authorized companies. The FCA's warning, issued on December 6, emphasizes that unauthorized entities cannot promote financial services in the UK, and individuals may not have financial law protection when dealing with such entities.
Poloniex's $100 Million Hack: Restoration and Resumption of Services
In August, the FCA disclosed that, since 2020, it has received 291 applications from crypto companies seeking registration, approving only 38. In October, 143 crypto companies, including HTX and KuCoin, were added to its warning list. In the case of both Huobi and KuCoin, two cryptocurrency exchanges that originate from Asia, the FCA warning message was the same: "This firm may be promoting financial services or products without our permission. You should avoid dealing with this firm." The regulator has authorized only one entity since then: PayPal UK.
Poloniex, which experienced a $100 million hack on November 10, has completed most of its restoration efforts and resumed deposit and withdrawal services for specific cryptocurrencies via the Tron network on December 5. Tron's Founder, Sun who also owns HTX, has seen his platforms endure four hacks in the last two months, resulting in significant losses. Despite attempts to enhance security, the resumption of services for more cryptocurrencies on Poloniex will be implemented gradually, according to the company's official statement.
New Guidance Targets Crypto Promotions to UK Consumers
Finance Magnatesreported earlier that the FCA had updated guidance for cryptoasset firms, extending oversight to crypto promotions targeting UK consumers. The rules, aiming to enhance consumer awareness of crypto investments, address compliance issues, with over 200 firms initially falling short of requirements.
The FCA's guidance, born out of industry consultation, aligns with the "Consumer Duty" act for authorized firms, emphasizing conformity with high-risk investment rules. The FCA, recognizing the dynamic crypto sector, commits to engagement and periodic guidance reviews.
While cautioning about crypto's high-risk nature, the FCA issues rules for distinguishing good and poor marketing practices. A transitional period until January 8, 2024, is provided for firms to implement technical aspects of the new rules. The FCA plans a Discussion Paper on stablecoin regulation, underscoring its commitment to adapting regulations to the evolving crypto market.
This article was written by Tareq Sikder at www.financemagnates.com.
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