The Financial Conduct Authority (FCA) has launched legal proceedings in the High Court against HTX, alleging that the platform has engaged in systematic violations of promotion laws by marketing digital services without proper authorization. According to Steve Smart, the agency’s joint director of enforcement, this measure responds to the need to protect British consumers from marketing campaigns that fail to meet required transparency standards.
On the other hand, the civil lawsuit filed in the Chancery Division points out that the exchange, incorporated in Panama, has ignored multiple warnings issued by the regulatory authority. In this way, the FCA has formally requested the blocking of the company’s social media accounts within British territory, including platforms such as TikTok, Instagram, and YouTube, to mitigate the reach of its illegal financial posts.
The supervisory body’s offensive against unauthorized marketing
Likewise, the court has granted permission to serve the case outside the UK jurisdiction, allowing the process to move forward against HTX and several persons related to its advertising operations. This action is based on the 2023 FinProm regime, which dictates that any entity promoting digital assets must guarantee clear and accurate risk warnings. However, the platform has continued to broadcast promotional content, leading the regulator to describe these actions as a flagrant breach of current cryptocurrrencies regulations.
Furthermore, the regulator has urged tech giants like Google and Apple to remove HTX applications from their virtual stores in the country, seeking to limit access for new retail investors. Therefore, the firm has been included in an official warning list, notifying citizens that they lack government protection regarding potential complaints, as the exchange operates outside the legal framework established for companies managing criptomonedas.
What consequences will HTX face for bypassing FCA rules?
On the other hand, the impact of this lawsuit marks a historic precedent as it is the first time the agency has taken enforcement actions against an international firm for illegal promotions. By not being registered under anti-money laundering rules, HTX places its users in a position of extreme financial vulnerability, as they do not have the backing of the Financial Ombudsman Service. Nevertheless, the regulator maintains its stance on fostering a competitive but strictly regulated market to prevent fraud.
However, HTX has recently attempted to restrict the registration of new British customers, although the supervisory body considers these measures insufficient and lacking long-term guarantees of permanence. Therefore, the judicial process is expected to determine severe economic sanctions and definitive operational restrictions. In this manner, the platform’s future in the region will depend on its ability to align with the legal standards that the UK requires for marketing digital assets.
As the trial progresses in the coming months, investors must stay alert to High Court rulings that could redefine digital asset marketing. Consequently, compliance with regulations will be the determining factor for the survival of foreign exchanges in the British market.
