Summary
- The Financial Conduct Authority (FCA) of the UK is negotiating with HTX regarding allegations that the exchange unlawfully promoted crypto services to UK consumers.
- The High Court has temporarily halted proceedings until late August to allow both parties to finalize an agreement, as reported by Reuters.
- The FCA's allegations also involve a Panamanian entity and four unspecified categories of individuals, including potential future owners of the exchange up until October 2028.
The Financial Conduct Authority (FCA) is currently in negotiations with HTX to resolve claims related to illegal cryptocurrency promotions targeted at UK consumers. The High Court in London has paused legal actions until late August to facilitate discussions between the two parties, according to court documents cited by Reuters. Initial correspondence occurred in March, leading to three months of discussions, which were subsequently extended for another two months on June 25.
The FCA initiated legal proceedings in the Chancery Division on October 21 of the previous year, marking the first enforcement action against a crypto exchange for marketing practices, with the formal complaint released in February. The FCA seeks both an injunction and a declaration affirming that the defendants violated section 21 of the Financial Services and Markets Act, which prohibits unauthorized financial promotions.
The specifics of the claim identify Huobi Global S.A., registered in Panama in May 2023, along with four categories of "persons unknown": those who own or control htx.com, those referred to as "HTX Operators" in the exchange’s user agreement, the operators of its social media accounts, and anyone who assumes these roles before October 31, 2028. Notably, Justin Sun, who acquired a controlling interest in the exchange in 2022, is not mentioned in the claim.