HTX, a crypto exchange advised by Chinese billionaire Jason Sun, has found itself at the centre of an FCA lawsuit over promoting services in the UK.
The Financial Conduct Authority (FCA) has filed a lawsuit against HTX, a global cryptocurrency exchange, alleging the company unlawfully promoted crypto services in the UK.
The civil case, launched on October 22, accuses the digital asset platform of breaching the financial promotions regime. In an emailed statement to Reuters, the regulator said it had begun civil proceedings in the High Court against HTX for unlawfully promoting cryptoasset services to UK consumers in violation of the regime.
“This action is part of our commitment to protect consumers and uphold the integrity of UK financial markets,” an FCA spokesperson said.
Under the UK’s financial promotions regime, companies must be registered or approved by the FCA before they can advertise or promote cryptoassets to UK consumers. This is intended to ensure transparency, accountability and consumer protection in the crypto market.
The FCA has expressed concern UK users dealing with HTX could face difficulties if disputes arise, as they would not have access to the Financial Ombudsman Service for complaints. Consumers would also not be protected by the Financial Services Compensation Scheme (FSCS), meaning they are unlikely to recover funds if the firm collapses.
This is not the first time the FCA has taken action against HTX. In October 2023, the regulator issued a warning to the exchange, then operating as Huobi, over unlawful promotions.
At the time, the FCA warned: “This firm may be promoting financial services or products without our permission. You should avoid dealing with this firm.”
What is HTX and who is behind it?
When the FCA’s 2023 warning was issued, HTX was still known as Huobi. Originally founded in China, the exchange now operates offices in Hong Kong, South Korea, Japan and the US.
A key figure linked to HTX is Chinese entrepreneur Justin Sun, who serves as an adviser to the company and is also the CEO of BitTorrent. In 2023, Sun was charged by the US Securities and Exchange Commission (SEC) over the “unregistered offer and sale of crypto asset securities.”
The SEC alleged Sun engaged in wash trading using Tronix (TRX) and BitTorrent tokens, buying and selling them simultaneously to artificially inflate market activity. The charges also claimed Sun paid celebrities to promote the coins without disclosing their sponsorships.
Sun’s ties extend to US politics as well. The billionaire has reportedly invested about $75m in the Trump family’s crypto venture, World Liberty Financial.
