HTX, the Seychelles-based crypto exchange, has come face-to-face with a legal issue in the U.K. The country’s Financial Conduct Authority (FCA) has reportedly sued HTX citing illegal promotion of digital assets. A lawsuit has been filed with the London High Court against several entities that make for the overall HTX ecosystem.
The FCA said its step to initiate this civil proceeding against HTX is aimed at safeguarding U.K.’s financial markets and protecting the investor community, a report by Bloomberg said on Tuesday, October 22.
Justin Sun, the founder of Tron, serves as an advisor to HTX. The Bloomberg report did not confirm if Sun has been named among defendants in the filing. Elaborate details on the lawsuit remains undisclosed for now.
HTX has neither accepted nor denied the report as of now. Its response on the situation remains awaited for now.
FCA’s move against HTX could be aimed at setting a no-tolerance threshold around illegal and non-compliant crypto promotions in the country.
As per reports, HTX’s operations are not authorized in the U.K. and has been flagged against by the FCA in 2023.
Owing to the volatile nature of the crypto assets, the U.K. has kept a clear directive around crypto advertisements in the country.
In 2021, U.K.’s Advertising Standards Authority (ASA) had banned crypto ads by brands like Papa John’s Pizza, Coinbase, Kraken, and eToro among others on grounds of being misleading. In 2022, the FCA reportedly started considering proposals on financial promotion advertisements.
Finally in 2023, the FCA unveiled stricter rules around crypto ads, allowing only registered firms to do so. Additionally, the FCA mandated all ads to carry statutory warnings around crypto being unregulated in the country and poses financial risks.
The country is expected to finalize its comprehensive crypto rules by the end of 2026.