UK Regulator and Crypto Exchange HTX Locked in Settlement Negotiations
Settlement Talks Between FCA and HTX Over Crypto Marketing Allegations
By Kirstin Ridley and Elizabeth Howcroft
LONDON, Aug 13 (Reuters) - Britain's financial regulator and HTX, a cryptocurrency exchange under UK and European Union sanctions, are in talks to settle allegations that the group is illegally promoting crypto services in the UK, court documents show.
Background of the Lawsuit
The Financial Conduct Authority last October sued HTX — formerly known as Huobi — one of the world's largest crypto platforms, in which Chinese billionaire Justin Sun bought a controlling stake in 2022.
But London's High Court has halted proceedings to give both sides two months until late August to settle their dispute, the filings show.
Significance of the FCA Case
The lawsuit — the first FCA case against a crypto firm over marketing to UK consumers — highlights the challenges of trying to police global crypto companies, which can have opaque corporate structures and ignore the regulator while reaching customers via the long arm of the internet.
The FCA and HTX declined to comment on the status of talks. Lawyers for HTX did not respond to requests for comment.
HTX's Response and Commitment
HTX's Stance on Regulatory Discussions
'DEDICATED TO UPHOLDING HIGH STANDARDS'
HTX also declined to comment on timelines, the details of regulatory discussions or legal proceedings.
Statement from HTX Spokesperson
A HTX spokesperson said: "HTX remains dedicated to upholding high standards of compliance, transparency, and user protection and we will continue working collaboratively with the regulators to support the sustainable development of the cryptocurrency ecosystem."
In an undated notice posted on its website, HTX says its products and services are not intended for UK users.
FCA's Actions and Regulatory Measures
Details of the FCA Lawsuit
The FCA said in October that its lawsuit, filed against Panama-incorporated Huobi Global and "persons unknown" who operate and control HTX, would protect consumers and uphold UK financial market integrity.
In February, it accused HTX of breaching UK financial promotion rules that have applied to cryptoassets since 2023.
HTX had ignored repeated attempts to engage and had an "opaque operational structure", the FCA said.
Progress of Settlement Negotiations
But both sides exchanged emails in March and began three months of settlement talks, which were then extended by another two months on June 25, court orders show.
Impact on Crypto Companies and UK Consumers
FCA's Requirements for Crypto Firms
Crypto companies seeking British customers have to register with the FCA and submit to anti-money laundering and financial crime checks. HTX and Huobi were added to the FCA's list of unauthorised companies in 2023 and 2024, a measure used by the regulator to warn consumers against dealing with companies.
FCA's Efforts to Limit HTX's UK Presence
The FCA has also urged social media companies to remove HTX products from UK app stores and block HTX's accounts for UK-based users.
(Reporting by Kirstin Ridley and Elizabeth Howcroft; Editing by Tommy Reggiori Wilkes)
