The UK’s Financial Conduct Authority (FCA) is stepping up its enforcement campaign against unregistered cryptocurrency firms, issuing hundreds of warnings and filing lawsuits against those promoting or operating without authorization.
The regulator said it had flagged unlicensed exchanges including Elite Bit Markets, Nexure Gainbit, Plux Crypto, and HTX in recent weeks.
On Tuesday, the FCA filed legal action against HTX for offering crypto services to UK residents without registration.
Crackdown on Unregistered Exchanges
An FCA spokesperson said: “We have seen crypto firms react positively to our financial promotions rules and regulations; however, where we still see poor practices, we will not hesitate to take action where firms appear to be breaching our rules.”
Under UK law, companies offering crypto services must register with the FCA under anti-money laundering rules and comply with the financial promotions regime introduced in 2023.
The renewed scrutiny comes as the UK relaxes certain crypto-related restrictions — including lifting the ban on crypto exchange-traded notes and introducing a framework for tokenized investment funds.
Balancing Regulation and Innovation
Despite its openness to innovation, the UK maintains strict advertising and consumer protection rules for crypto firms.
The FCA classifies financial products into three risk categories.
Readily Realizable Securities, such as publicly traded shares, are considered low risk.
Most cryptocurrencies fall under Restricted Mass Market Investments, which are classified as medium risk and must include prominent warnings about potential losses.
Penalties for Misleading Promotions
Crypto companies are also prohibited from offering bonuses or rewards that could mislead consumers into investing.
Executives found guilty of breaching these advertising rules face up to two years in prison and other penalties.
Despite these deterrents, the Financial Times reported that nearly half of all flagged crypto advertisements remained online between October 2023 and October 2024, highlighting enforcement challenges.
The FCA said it remains committed to maintaining market integrity while ensuring the UK remains competitive as a hub for responsible digital asset innovation.
