The regulator said that investors dealing with the crypto exchange may not be protected by the FSCS.
"Bitfinex is very disappointed by the action taken by the FCA," the exchange stated.
Bitfinex is under scrutiny by the regulators in the UK. The
Financial Conduct Authority (FCA) raised concerns about the cryptocurrency
exchange today (Friday), warning investors of potential risks associated with it.
The regulator stated that Bitfinex may be promoting financial services or
products without its permission.
"If you deal with this firm, you won't have
access to the Financial Ombudsman Service if you have a complaint," the
financial watchdog cautioned. "You also won't be protected by the
Financial Services Compensation Scheme if things go wrong."
In a publicly-released statement, Bitfinex wrote: "Bitfinex is very disappointed by the action taken by the FCA."
"Over the past four months, Bitfinex has held detailed discussions with the FCA and has proactively taken measures to meet the FCA’s requirements including issuing a notice to all its customers providing detail of all the measures it has taken to meet the FCA’s requirements."
FCA Identifies Critical Crypto Marketing Issues
In the official statement, the FCA highlighted three
major issues with the marketing of crypto assets. Firstly, it pointed out that many
promotions emphasize the "safety," "security," and
"ease" of using crypto services without adequately addressing the
associated risks.
This lack of transparency is a cause for concern as
it may mislead potential investors. Secondly, risk warnings are often obscured
by small fonts or non-prominent positioning, making it easy for consumers to
overlook critical information about the risks involved in crypto investments.
In response to these issues, the FCA urged
companies that approve financial promotions for crypto firms to strictly adhere to regulatory guidelines. Failure to do so can result in actions such as
restrictions being placed on the offending firm. For instance, the FCA has
already imposed restrictions on some firms for not meeting the required standards
in approving crypto asset promotions.
Strict Adherence to Regulatory Guidelines
In September, the FCA issued its final warning in
relation to the recently implemented financial promotion rules. This warning,
authored by Lucy Castledine, the Director of Consumer Investment, and Matthew Long, the Director of Payments and Digital Assets, emphasized the need for firms to
urgently reconsider their position if they believe they will be in breach of
the new regulations.
The FCA underlined that the new regulatory regime is
not meant to hinder consumer access to existing assets but is aimed at
preventing high-risk investment activity and promoting consumer protection.
The financial promotion regime is expansive,
encompassing communications made through websites or apps. Most, if not all,
crypto asset firms offering services to UK consumers are expected to fall under
this new regulation. The regime's core objective is to ensure consumers base
their investment decisions on accurate information.
Firms that fail to comply with the new regime face
severe consequences, including criminal charges. Penalties may include
imprisonment of up to two years, unlimited fines, or both.
"Bitfinex has also blocked a range of website pages to visitors from the UK including the Bitfinex Affiliates pages, Staking pages, Credit / Debit Cards, Lending Pro, Bitfinex Borrow, various ‘How to buy’ pages and the Mobile App information page," Bitfinex added.
"Bitfinex has a strong track-record of working with regulatory authorities and law enforcement agencies globally to combat crime and scams and aid the protection of investors. It is therefore disappointing that its efforts have not been acknowledged in this case."
Bitfinex is under scrutiny by the regulators in the UK. The
Financial Conduct Authority (FCA) raised concerns about the cryptocurrency
exchange today (Friday), warning investors of potential risks associated with it.
The regulator stated that Bitfinex may be promoting financial services or
products without its permission.
"If you deal with this firm, you won't have
access to the Financial Ombudsman Service if you have a complaint," the
financial watchdog cautioned. "You also won't be protected by the
Financial Services Compensation Scheme if things go wrong."
In a publicly-released statement, Bitfinex wrote: "Bitfinex is very disappointed by the action taken by the FCA."
"Over the past four months, Bitfinex has held detailed discussions with the FCA and has proactively taken measures to meet the FCA’s requirements including issuing a notice to all its customers providing detail of all the measures it has taken to meet the FCA’s requirements."
FCA Identifies Critical Crypto Marketing Issues
In the official statement, the FCA highlighted three
major issues with the marketing of crypto assets. Firstly, it pointed out that many
promotions emphasize the "safety," "security," and
"ease" of using crypto services without adequately addressing the
associated risks.
This lack of transparency is a cause for concern as
it may mislead potential investors. Secondly, risk warnings are often obscured
by small fonts or non-prominent positioning, making it easy for consumers to
overlook critical information about the risks involved in crypto investments.
In response to these issues, the FCA urged
companies that approve financial promotions for crypto firms to strictly adhere to regulatory guidelines. Failure to do so can result in actions such as
restrictions being placed on the offending firm. For instance, the FCA has
already imposed restrictions on some firms for not meeting the required standards
in approving crypto asset promotions.
Strict Adherence to Regulatory Guidelines
In September, the FCA issued its final warning in
relation to the recently implemented financial promotion rules. This warning,
authored by Lucy Castledine, the Director of Consumer Investment, and Matthew Long, the Director of Payments and Digital Assets, emphasized the need for firms to
urgently reconsider their position if they believe they will be in breach of
the new regulations.
The FCA underlined that the new regulatory regime is
not meant to hinder consumer access to existing assets but is aimed at
preventing high-risk investment activity and promoting consumer protection.
The financial promotion regime is expansive,
encompassing communications made through websites or apps. Most, if not all,
crypto asset firms offering services to UK consumers are expected to fall under
this new regulation. The regime's core objective is to ensure consumers base
their investment decisions on accurate information.
Firms that fail to comply with the new regime face
severe consequences, including criminal charges. Penalties may include
imprisonment of up to two years, unlimited fines, or both.
"Bitfinex has also blocked a range of website pages to visitors from the UK including the Bitfinex Affiliates pages, Staking pages, Credit / Debit Cards, Lending Pro, Bitfinex Borrow, various ‘How to buy’ pages and the Mobile App information page," Bitfinex added.
"Bitfinex has a strong track-record of working with regulatory authorities and law enforcement agencies globally to combat crime and scams and aid the protection of investors. It is therefore disappointing that its efforts have not been acknowledged in this case."
Crypto Trends and Predictions: Major Expectations for the Industry in 2025
Executive Interview with Elina Pedersen | Your Bourse | FMLS:24
Executive Interview with Elina Pedersen | Your Bourse | FMLS:24
Executive Interview with Elina Pedersen, Chief Revenue Officer at Your Bourse at the Finance Magnates London Summit 2024
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Executive Interview with Elina Pedersen, Chief Revenue Officer at Your Bourse at the Finance Magnates London Summit 2024
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Executive Interview with Rauan Khassan | TradingView | FMLS:24
Executive Interview with Rauan Khassan | TradingView | FMLS:24
Executive Interview with Rauan Khassan from TradingView at the Finance Magnates London Summit 2024
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Executive Interview with Rauan Khassan from TradingView at the Finance Magnates London Summit 2024
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Executive Interview with Nadia Edwards-Dashti | Harrington Star | FMLS:24
Executive Interview with Nadia Edwards-Dashti | Harrington Star | FMLS:24
Fintech Talent in the UK: The Human Factor Driving Industry Change 🌟
What does it take to attract, retain, and upskill the best fintech talent in today’s rapidly evolving UK market? In this engaging interview, Nadia Edwards-Dashti, Chief Customer Officer at Harrington Star, explores the future of talent recruitment, the rise of sales roles, and how AI is reshaping the industry—without replacing the human touch.
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Fintech Talent in the UK: The Human Factor Driving Industry Change 🌟
What does it take to attract, retain, and upskill the best fintech talent in today’s rapidly evolving UK market? In this engaging interview, Nadia Edwards-Dashti, Chief Customer Officer at Harrington Star, explores the future of talent recruitment, the rise of sales roles, and how AI is reshaping the industry—without replacing the human touch.
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Executive Interview with Roberto Politano | Finnovate Finance | FMLS:24
Executive Interview with Roberto Politano | Finnovate Finance | FMLS:24
Executive Interview with Roberto Politano from Finnovate Finance at the Finance Magnates London Summit 2024
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Executive Interview with Roberto Politano from Finnovate Finance at the Finance Magnates London Summit 2024
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#fmls #fmls24 #fmevents #cyptotrading #DigitalAssets #pepperstone
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