UK's FCA targets Justin Sun's HTX in regulatory enforcement action

The UK’s Financial Conduct Authority filed a lawsuit against several entities linked to HTX, a prominent crypto exchange. HTX, which has been linked to Justin Sun and the Trump family, will be sued for unlawful asset promotion. 

The UK Financial Conduct Authority has filed a lawsuit against the entities constituting the HTX digital asset exchange. The FCA has previously issued warnings on using the market and has targeted the exchange for unlawful asset promotion. 

HTX, formerly Huobi, has been linked to crypto founder Justin Sun and the Trump family. However, Sun was not listed among the defendants.

The regulators have not given further details on the nature of the lawsuit, and which entities were affected. So far, HTX has been the go-to exchange for USD1 stablecoins in its initial expansion with new listings. 

“The FCA has commenced civil proceedings in the High Court against HTX, a global crypto exchange, for unlawfully promoting cryptoasset services to UK consumers in breach of the UK’s financial promotions regime,” stated the FCA in a statement for Bloomberg.

The financial regulator explained its main motivation is consumer protection and upholding the standards of UK financial markets. 

UK regulator claims HTX unlawfully targeted investors in the country

The UK regulator alleges that HTX or persons on behalf of the exchange targeted UK consumers with crypto services and assets. The exchange and its related marketing team targeted those customers in ways that contravened Britain’s financial promotions regime. 

Reportedly, HTX ran promotions on various social media platforms. The FCA did not provide more details on which assets and services were promoted and how they targeted UK-based investors.

HTX has been included in the FCA warning list since 2023, urging consumers to avoid the exchange. The exchange has taken a step back as one of the relatively smaller markets, with around $4.6B in daily volumes. 

Despite the market’s trust score of 9/10 based on Coingecko’s tracking, HTX is still considered a risk for UK-based investors. The FCA did not give specific reasons for avoiding HTX, except that the market is not properly registered in the UK. 

HTX offers services to other crypto projects

Justin Sun’s ownership of HTX means crypto projects seek him out for partnerships and special programs through the exchange. 

HTX has an extensive rewards program for staking assets, including stablecoins. The exchange carries USD1, the stablecoin issued by World Liberty Fi, the Trump family crypto fund. 

The exchange grants up to 20% APY for some assets, with around 15% for stablecoins. HTX also carries trading pairs for World Liberty Fi (WLFI) and Official Trump (TRUMP), previously also part of its reward programs. 

The TRON network also aims to boost its position as a platform for high-profile assets. TRON is also performing regular TRX burns to support the native token price, which has retained the $0.31 level despite the market downturn. 

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