#What lawsuit did the UK Financial Conduct Authority recently file?
The UK Financial Conduct Authority has initiated a legal action against HTX, previously known as Huobi, over allegations of illegal promotion of cryptocurrency products to consumers in the UK. This legal move represents the FCA's first enforcement under the newly established crypto promotions regulations that came into effect in October 2023.
#What are the main allegations against HTX?
HTX, which is connected to the notable crypto entrepreneur Justin Sun, is accused of continuing its promotional activities on various social media platforms including TikTok, X, YouTube, and Facebook despite receiving warnings from the FCA. The regulator has highlighted concerns regarding HTX’s inadequate engagement and its unclear ownership structure, further exacerbating the issues surrounding its operations.
#What has HTX done in response to the FCA's actions?
While HTX has taken measures to limit new user registrations in the UK, the FCA points out that existing users still have access to the concerning promotions. There is skepticism regarding whether HTX will ensure that these changes remain in place moving forward. In light of this situation, the FCA has reached out to major tech companies including Apple and Google, as well as social media platforms, urging them to take action against HTX’s apps and accounts within the UK.
#What consumer protections are in place for users of HTX?
The FCA has reiterated that HTX is still listed on its public warning list, indicating that consumers using this platform do not have protections under the UK Financial Ombudsman Service. This means that in the unfortunate event that HTX were to fail, consumers could potentially be unable to recover their funds. Retail investors should approach such platforms with caution and stay informed about the potential risks involved.