Global crypto trading platform HTX is facing enforcement action from the U.K.’s Financial Conduct Authority (FCA), which alleges that the firm has breached its rules by publishing illegal financial promotions on various social media sites.
The FCA has launched legal proceedings against HTX in the Chancery Division of the High Court, alleging that it has illegally promoted its crypto asset services to investors in the U.K., which amounts to a criminal offence under new rules that took effect in late 2023 to govern crypto promotions.
In the proceeding, the FCA is seeking an injunction against the operators of the HTX platform, and a declaration that they’ve breached the financial promotions law.
The regulator noted that, since the new regime came into force, most crypto platforms have sought to comply with its requirements, but it alleged that HTX has “continued to publish financial promotions in breach of these rules on its website and on social media platforms, including TikTok, X, Facebook, Instagram and YouTube.”
“HTX’s conduct stands in stark contrast to the majority of firms working to comply with the FCA’s regime,” Steve Smart, joint executive director of enforcement and market oversight at the FCA, in a release.
“This is the first time we’ve taken enforcement action against a crypto firm illegally marketing their products to U.K. consumers,” he added.
The allegations have not been proven.
The FCA noted that it has requested that social media companies block HTX’s accounts to U.K.-based investors, and that it has asked the Google Play and Apple stores in the U.K. to remove its apps.
Additionally, the FCA said that, while the platform has taken steps to prevent U.K. investors from opening new accounts, existing users can still access the platform, and “HTX has given no assurance that the changes will be permanent,” it said.
As a result, the FCA, “remains concerned that the risk of ongoing breaches continues,” it noted.