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U.K. Regulator Takes Aim at FTX

By Geoffrey Smith

Investing.com -- The U.K.'s Financial Conduct Authority fired an opening salvo against crypto exchange FTX, issuing a public warning to consumers that it has no license to do business in the country.

"We believe this firm may be providing financial services or products in the U.K. without our authorization," the FCA said in a short statement on its website, adding that: "You will not have access to the Financial Ombudsman Service or be protected by the Financial Services Compensation Scheme (FSCS), so you are unlikely to get your money back if things go wrong."

The warning is an echo of the FCA's move against FTX's biggest rival, Binance, last year, and is the latest twist in a long-running game of cat and mouse between regulators and crypto exchanges, which have traditionally tried to penetrate developed markets from offshore jurisdictions with less developed supervision.

Binance was also criticized last year by the FCA and was ultimately pressured into saying it would reapply for supervision in the U.K.

FTX currently operates in the European Economic Area through K-DNA Financial Services Ltd, which has an operating license from the Cyprus Securities and Exchange Commission. It also offers tokenized stock trading in the EEA through subsidiaries with licenses in Switzerland and Germany. However, the U.K.'s departure from the European Union and the EEA at the end of 2020 means that none of these gives it the right to trade in Britain.

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