FCA Cracks Down on Crypto Exchange HTX Promotions

• Action Taken: The FCA has begun formal legal proceedings against HTX (formerly Huobi) for illegally promoting cryptoasset services to UK consumers.
• Core Allegation: HTX is accused of breaching the UK’s financial promotions regime, which requires crypto marketing to be authorised by the FCA or approved by an FCA-authorised firm, a failure of which constitutes a criminal offense.
• Non-Compliance: According to the FCA, HTX ignored previous warnings and continued to run promotions on its website and social media platforms like TikTok, X (formerly Twitter), and Instagram.
• Escalation Measures: The FCA has requested that major tech platforms block HTX’s social media accounts and that Apple and Google remove HTX apps from their UK app stores.
• Firm Status: HTX is currently on the FCA’s Warning List, meaning UK consumers have no access to the Financial Ombudsman Service or compensation schemes if the firm fails.

This legal action is a clear line in the sand. For months, the industry has watched to see how seriously the FCA would enforce its new, stricter financial promotions regime. By taking a major global player like HTX to court, the regulator is demonstrating it has moved beyond simple warnings and is prepared to use its full legal powers. The FCA claims its attempts to engage with HTX were ignored and that the firm operates an “opaque” structure hiding its ownership. This move will likely trigger a strategic reassessment among other non-compliant exchanges targeting UK customers. They now face a choice: either withdraw from the market completely, as Bybit did preemptively, or urgently find an FCA-authorised partner to approve their promotions—a limited and complex path.

While the FCA’s move is a decisive step toward consumer protection, it’s not without potential drawbacks. Critics may argue that such stringent enforcement could drive UK consumers toward entirely unregulated and potentially more dangerous offshore platforms that make no effort to comply. The legal proceedings themselves could be protracted and complex, with an uncertain outcome. HTX might argue that its promotions were not specifically targeted at UK consumers or that it was taking steps toward compliance. Since the proceedings began, HTX has reportedly restricted new UK user sign-ups, but the FCA notes existing users can still access promotions, and the changes may not be permanent.

The primary focus will be on the outcome of these legal proceedings, which will establish a crucial legal precedent for the crypto financial promotions regime. We should also monitor the FCA’s Warning List for signs of action against other prominent exchanges named there, such as KuCoin and BitMEX. The response from tech giants like Apple and Google will also be telling; their compliance with the FCA’s takedown requests would significantly amplify the regulator’s enforcement power. Finally, observe how other exchanges modify their UK-facing services, particularly the implementation of geo-blocking or other technical barriers to prevent access by UK residents, a measure the FCA has previously encouraged.

• Enforcement has teeth: The FCA is willing to escalate from warnings to legal action, making non-compliance a significant legal and business risk.
• The grace period is over: The era of unregulated crypto marketing to UK consumers has definitively ended.
• Compliance is non-negotiable: Overseas crypto firms must now have a concrete strategy for the UK market, whether that means full compliance, partnership with an authorised firm, or complete withdrawal.
• A test case for regulation: This action against HTX is the first major test of the FCA’s new powers and will shape the operational landscape for crypto firms in the UK for the foreseeable future.