Crypto exchanges: a warning to overseas firms promoting to UK customers

The Financial Conduct Authority (FCA) has begun legal proceedings against global crypto exchange HTX (formerly Huobi) for illegally promoting cryptoasset services to UK consumers. A warning to overseas cryptoasset firms seeking to market their services into the UK, it marks the first time the FCA has brought legal action for alleged illegal promotion of crypto services.

Companies offering cryptoasset products to UK consumers must adhere to regulations designed to safeguard consumers against unfair and misleading marketing practices under the Financial Services and Markets Act 2000 (FSMA 2000). On 8 October 2023, the FSMA 2000 (Financial Promotion) (Amendment) Order 2023 came into effect, extending Section 21 of FSMA to cover cryptoassets through the Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2023 and requiring all cryptoasset firms marketing to UK consumers, including overseas firms, to comply with the UK financial promotions regime. Since these regulations took effect, the FCA has actively engaged with industry participants, and most firms have responded positively by ensuring compliance with the new framework.

Enforcement action against HTX

HTX, previously operating under the name Huobi, facilitates trading across more than 700 digital assets, including Bitcoin, Ethereum and its proprietary token HT. Despite prior warnings from the FCA regarding HTX's unlawful promotion of crypto services to UK consumers, the platform has persisted in publishing financial promotions that contravene these rules on its website and across multiple social media channels, including TikTok, X, Facebook, Instagram and YouTube.

The FCA initiated legal proceedings in the Chancery Division on 21 October 2025 against the defendants for breaching section 21 of FSMA 2000 through the communication of financial promotions and sought an injunction to prevent the defendants from continuing such conduct. On 4 February 2026, the High Court granted permission for the proceedings to be served outside the jurisdiction and through alternative service methods.

The particulars of claim state that HTX's website remained accessible to UK consumers, with an FCA employee successfully purchasing cryptoassets using a UK IP address and UK driving licence. The FCA further identifies additional factors it intends to rely upon to establish that the financial promotions were capable of producing an effect in the UK, namely: 

    i.    contractual terms that restricted UK customers from trading derivatives but permitted spot cryptoasset transactions;

    ii.    the website's availability in English;

    iii.    the inclusion of GBP as a supported currency;

    iv.    acceptance of UK photographic identification for account verification;

    v.    data evidencing website visits originating from the UK; and 

    vi.    promotional activity on social media platforms accessible to UK users.

According to the FCA's release, HTX maintains a corporate structure that conceals the identities of its beneficial owners and those responsible for operating its website and has repeatedly failed to respond to the FCA's attempts at engagement. Following the commencement of proceedings, HTX implemented measures to prevent new UK customers from opening accounts; however, existing UK account holders retain the ability to log in and access unlawful financial promotions, and HTX has provided no commitment that these restrictions will remain in place on a permanent basis.

The FCA requested that social media companies restrict access to HTX's social media accounts for UK-based consumers and sought the removal of HTX applications from both the Google Play and Apple app stores in the UK. HTX currently appears on the FCA's Warning List, meaning that consumers who engage with this firm will be unable to access the Financial Ombudsman Service in the event of a dispute. Should the firm cease operations, consumers are unlikely to recover their funds and are therefore advised to avoid transacting with HTX or similar unauthorised firms.

In a warning to crypto currency firms, Steve Smart, joint executive director of enforcement and market oversight at the FCA, commented:

'This marks the first occasion on which we have pursued enforcement action against a cryptocurrency firm for unlawfully marketing its products to UK consumers. We remain committed to taking action against firms that disregard our rules.'

Implications for cryptocurrency service providers

These legal proceedings serve as a clear reminder to firms marketing cryptoassets in the UK that the FCA is actively monitoring compliance with the financial promotions regime. The scope of what constitutes a promotion is broad and encompasses websites, applications and social media content. The FCA will endeavour to engage with crypto businesses it considers to be non-compliant and stands ready to pursue court action where such engagement fails to achieve the desired outcome.

The routes to market crypto products to UK customers are limited: without a UK authorised or registered office, their cryptoasset promotions must either fall within an exemption or obtain approval from a suitably licensed UK firm. Crypto firms must implement controls to restrict UK consumers from accessing their promotions where no compliant route exists, and the FCA has previously recommended the use of geo-blocking or other location-based restrictions. Firms must either:

• Obtain FCA authorisation to carry on regulated activities in the UK;
• Secure FCA registration under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and have all UK-facing promotional materials approved by an FCA-authorised firm; or
• Ensure promotions fall within a specific exemption under the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.

Simply stating in the terms and conditions that UK customers are excluded will not provide protection if, in practice, UK consumers can still access the platform and its services. The consequences of failing to comply with the UK financial promotions regime are severe, and can include:

• Criminal liability under section 25 FSMA 2000, carrying penalties of imprisonment for up to two years and/or unlimited fines for individuals involved;
• Injunctions sought by the FCA, restraining further promotional activity, which can be enforced against overseas defendants through alternative service methods;
• The FCA may request social media platforms to block offending firm's accounts and app stores to remove their applications in the UK;
• Severe reputational damage through inclusion of offending firms on the FCA Warning List; and
• Unenforceable agreements, with contracts entered into as a result of unlawful financial promotions may be unenforceable, creating significant legal and commercial risk.

How can Withers help crypto exchanges tackle these issues? 

Evidencing a significant escalation in the FCA's regulatory approach to cryptoasset promotions, the FCA's legal action serves as a clear warning to overseas cryptoasset firms: failure to comply with UK financial promotions rules may result in proven enforcement action. The FCA's five-year strategy for 2025 – 2030 prioritises the fight against financial crime, and over the past two years, the FCA has brought criminal charges against a greater number of individuals and is completing enforcement investigations more expeditiously.

For advice on FCA regulatory or other cryptoasset business compliance matters, Withers' international and multidisciplinary team are on hand to assist, with dedicated crypto and tax specialists in the UK, US, Hong Kong, Singapore, Italy and Japan. If you have any questions or concerns on how FSMA 2000 may affect you or your business, please do not hesitate to get in touch.