The Financial Conduct Authority (FCA) has filed a lawsuit against global crypto exchange HTX for unlawfully promoting cryptoasset services to UK consumers.

Formerly known as Huobi, the global cryptocurrency exchange offers trading in over 700 digital assets, including Bitcoin, Ethereum and its native token HT.

The FCA said that HTX breached the UK's Financial Promotions regime, a legal framework that regulates how financial products and services are marketed to consumers, aiming to ensure that promotions are fair and not misleading.

It applies to all companies, both British and foreign, that offer financial products to consumers in the United Kingdom.

Reuters reported that the regulator has filed the case against Huobi Global and four groups described as 'persons unknown', covering owners, operators and heads of promotions at the exchange.

The company has long been associated with Justin Sun, who serves as an advisor to the platform and claims the title of prime minister of Liberland, a self-proclaimed micro-nation.

HTX is not registered with the FCA and has been on its warning list since 2023, with the regulator advising consumers not to do business with the company.

“This firm is not authorised by us and may be targeting people in the UK,” said the UK watchdog “This firm may be promoting financial services or products without our permission. You should avoid dealing with this firm.”

On Thursday, an FCA spokesperson stated that the action is part of the organisation's commitment to protecting consumers and safeguarding the integrity of the UK financial markets.

“We have seen crypto firms react positively to our financial promotions rules and regulation, however where we still see poor practices we will not hesitate to take action where firms appear to be breaching our rules,” they said.

Companies marketing cryptoasset services to UK consumers (including companies based overseas) are required to register with the FCA under anti-money laundering regulations and comply with the UK's financial promotions regime.

In October 2023, the FCA introduced new rules for companies promoting crypto-assets.

Since then, the regulator has engaged in extensive collaboration with regulated and registered companies and published a series of updates to help companies comply with the rules.

“We have been pleased with the reaction we have seen,” it said.

It went on to say it is currently looking to develop a competitive and sustainable crypto asset regime.

“We are providing support to firms who are required to register with us under the Money Laundering Regulations and would encourage them to talk to our authorisations team,” it added.

The body added it recently set out the roadmap for the regulation of cryptoassets.

“As we finalise the rules, we will set out more detail on how firms conducing regulated activities will need to apply for authorisation before carrying out business in the UK,” it continued.

The regulator has also recently outlined new plans to support tokenisation in the asset management industry.

The FCA said it will provide guidance on how to manage tokenised fund registers under the regulator’s current rules through the UK Blueprint model, under which companies can operate a register of tokenised share holders within existing legal and regulatory frameworks.

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