Key facts
- The FCA and HTX are in settlement talks regarding illegal crypto promotions in the UK.
- High Court proceedings have been paused until late August to facilitate negotiations.
- The FCA claims HTX breached Section 21 of the Financial Services and Markets Act.
- A test purchase by an FCA employee confirmed UK users could trade on the platform.
- HTX was added to the FCA's warning list in October 2023.
- Justin Sun, who has a controlling stake in HTX, is not named in the FCA's claim.
Britain's Financial Conduct Authority (FCA) and crypto exchange HTX are reportedly engaged in settlement talks concerning the regulator's allegations of illegal promotion of crypto services to UK consumers. Proceedings in London's High Court have been paused until late August to allow the parties to reach an agreement. The FCA initiated legal action in October of the previous year, marking the first such enforcement action against a crypto exchange for marketing practices. The claim, published in February, seeks an injunction and a declaration that the defendants violated Section 21 of the Financial Services and Markets Act, which prohibits unauthorized financial promotions. The proceedings name Huobi Global S.A., a Panamanian company, and four categories of "persons unknown," including the current owner of htx.com and any future operators before October 31, 2028. An FCA employee, using a UK IP address and UK identification, successfully conducted a test purchase of cryptoassets and executed futures trades, demonstrating that UK users could still access the exchange's services. The FCA also noted the platform's operation in English, acceptance of GBP, and the fact that HTX's terms of service only restrict UK retail users from derivatives, not other cryptoassets, despite not actively preventing futures trading. HTX was placed on the FCA's warning list in October 2023, the same day new rules took effect. These negotiations occur alongside separate sanctions imposed on HTX and Justin Sun by the UK and the EU for alleged links to Russian sanctions evasion. The FCA's marketing claim, however, is distinct and focuses solely on promotional activities.