- The FCA issued hundreds of warnings to unregistered crypto exchanges, including HTX, Elite Bit Markets, and Plux Crypto.
- A lawsuit has been filed against HTX for promoting crypto services to UK residents without authorization.
- Stricter enforcement comes as the UK balances tougher rules with new pro-crypto measures like lifting the ban on ETNs.
The UK’s Financial Conduct Authority (FCA) has intensified its campaign to regulate the crypto industry, issuing hundreds of warnings and filing legal action against exchanges that continue to operate without registration.
In October, the FCA flagged unlicensed firms including Elite Bit Markets, Nexure Gainbit, Plux Crypto, and HTX for targeting UK residents. On Tuesday, the regulator confirmed that it had filed a lawsuit against HTX for promoting crypto services in violation of UK financial promotion rules.
Crypto firms react positively to our financial promotions rules, however, if they still see poor practices, they will not hesitate to take action.
Newsletter
Get weekly updates on the newest crypto stories, case studies and tips right in your mailbox.
Under UK law, crypto companies must register with the FCA under money laundering regulations and comply with financial promotions rules introduced in 2023 before advertising or providing services in the country.
Tougher enforcement amid regulatory easing
The FCA’s renewed enforcement push comes as the UK government seeks to balance strict consumer protection with its goal of remaining competitive in digital finance.
Recently, regulators lifted the ban on crypto exchange-traded notes (ETNs) and introduced a roadmap for tokenized investment funds, signaling a more open stance toward blockchain-based financial products.
However, the FCA maintains a zero-tolerance policy for firms operating outside its regulatory perimeter.
Strict advertising rules and penalties for violations
Crypto firms marketing in the UK face tight advertising restrictions under the FCA’s tiered classification of financial instruments:
- Readily Realizable Securities (RRS): Publicly traded, low-risk assets.
- Restricted Mass Market Investments (RMMI): Includes most cryptocurrencies — considered medium-risk and subject to strict marketing standards.
These standards require clear risk warnings, user education prompts, and know-your-customer (KYC) checks. Incentives such as rewards or bonuses to attract users are also heavily restricted.
Executives at firms that breach these rules could face up to two years in prison, alongside financial penalties.
Despite these measures, enforcement remains challenging the Financial Times reported that around half of the crypto ads flagged by the FCA between October 2023 and October 2024 remained online despite official warnings.
