British financial regulator warns against crypto exchange FTX

Britain's financial regulator has warned consumers not to deal with FTX, the cryptocurrency exchange run by billionaire Sam Bankman-Fried, in the latest clash between UK authorities and offshore digital asset firms.

The Financial Conduct Authority said the Bahamas-based exchange appeared to be offering products and services in the United Kingdom without its authorization, according to a statement on the regulator's website.

“This company is not authorized by us and is targeting people in the UK,” the statement said. FTX did not immediately respond to a request for comment.

The move against FTX, one of the largest digital asset exchanges, comes after a tough battle between the FCA and Binance as Britain steps up its efforts to control the often unregulated world of cryptocurrencies.

The FCA intervened against Binance last year, saying its "complex and high-risk financial products" posed "a significant risk to consumers" and that the world's largest crypto exchange had "failed to respond" to some of its basic queries, making it impossible to supervise the sprawling group.

Binance, one of FTX's main competitors, has committed to full compliance and reapplying for supervision in the UK.

Crypto exchange and wallet providers must register with the FCA for anti-money laundering supervision if their digital asset activities are “carried out by way of doing business in the UK,” according to an FCA guide.

The FCA and other financial regulators around the world have faced the challenge of protecting consumers and enforcing standards in crypto markets, where many of the largest groups are based in offshore jurisdictions. Both FTX and Cayman Island-registered Binance have established American subsidiaries to appease US authorities, but offer services in other countries from their international bases.

FTX's European division announced this month that Cyprus' financial regulator has granted it an investment firm license, as the crypto firm pushes to expand across the continent. FTX Chief Executive Bankman-Fried said at the time: “Securing this license in the European Union is an important step in achieving our goal of becoming one of the most regulated exchanges in the world.”

The FCA said that UK customers dealing with FTX do not have access to UK consumer protection such as the Financial Ombudsman or the Financial Services Compensation Scheme and are “unlikely to receive [their] money back if something goes wrong.”