The UK Financial Conduct Authority (FCA) has issued a warning against Sam Bankman-Fried’s digital asset exchange FTX, alleging that the Bahamas-registered company is offering unauthorised financial services and products to UK customers.
“We believe this firm may be providing financial services or products in the UK without our authorisation,” read the FCA statement, adding: “This firm is not authorised by us and is targeting people in the UK.”
The regulator warned that traders are not protected by the Financial Services Compensation Scheme thus are “unlikely to get your money back if things go wrong”.
But in response, an FTX spokesperson told Bloomberg: “We’re looking into it and communicating with regulators; we believe that a scammer is impersonating FTX… The phone numbers listed by the FCA are not from FTX and are listed as a crypto scam.”
Heads up: a scammer has been impersonating FTX in the UK by phone! Please only use https://t.co/ZcBNEuyQvH, https://t.co/6mG6iOFv3o, https://t.co/X88vVFRKde, etc. to access FTX, and do not respond to any phone numbers etc. FTX will never call you by phone.
— SBF (@SBF_FTX) September 19, 2022
Following FTX’s statement, the FCA reiterated that “given the risks to consumers from unregistered or scam firms it’s important we issue warnings as quickly as possible and will issue updates if further information comes to light”.
Despite the dubious regulatory position of digital currencies, even offshore-registered exchanges have strict requirements under the FCA.
The world’s largest crypto exchange Binance ceased UK-based operations last June after an FCA crackdown cited weak customer protections at the Caymans-registered exchange.
Neither FTX or Binance are on the FCA’s cryptoasset register, which lists all cryptoasset firms that are compliant with the 2017 amended Money Laundering, Terrorist Financing and Transfer of Funds Regulations.