Crypto Titans KuCoin and Huobi Face Increased Scrutiny as UK's Warning List Grows

The FCA's warning list in the UK has now expanded warning list to include leading cryptocurrency trading platforms Huobi (HTX) and KuCoin due to concerns about misleading promotional tactics within the UK market. This expansion is part of a broader push to enforce new regulations around financial promotions, which now mandate crypto service providers to present clear risk warnings to UK consumers and to adhere to more stringent technical standards, including an obligatory 24-hour cooling-off period for new clients.

In reaction to these regulatory moves, Huobi has stated that it does not operate or market its services in the UK. In contrast, KuCoin has expressed its determination to modify its offerings to align with the laws and regulations of each region.

Justin Sun The crypto mogul behind Huobi has previously faced his share of regulatory hurdles during a period when the US SEC accused him of deceptive activities and market manipulation related to TRX, which is the primary cryptocurrency on the Tron blockchain. faced Huobi holds licenses to operate in various jurisdictions, including Lithuania, Gibraltar, Dubai, Australia, the British Virgin Islands, and countries in South America. Notably, it is not explicitly banned from operating in the UK.

Compliance Hurdles for UK Crypto Firms Amidst Intensifying Regulations

The FCA's updated warning list now comprises 147 firms, with potential penalties for non-compliance ranging from requests to shut down websites and apps to severe fines and even incarceration.

Effective September 1, crypto firms in the UK must gather, validate, and share data regarding cryptocurrency transactions, known as the 'Travel Rule.' This legislation aligns with the FATF's call for universal adoption of the Travel Rule, aiming to standardize operational practices across the crypto sector similar to traditional financial services.

In the meantime, major global exchanges such as Binance and OKX have stepped up their compliance efforts concerning the new financial promotion regulations in the UK, prioritizing clarity and consumer protection. Binance has launched a dedicated website for users in the UK, while OKX has streamlined its token offerings and introduced prominent risk warnings.

These regulatory changes specifically target retail clients in the UK, providing exemptions for various institutional and professional investors. announced Adhering to the updated regulations poses a significant challenge for crypto firms, as they must navigate an array of differing rules in multiple regions while simultaneously aligning their operations with the shifting legal landscape.

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