UK’s FCA sues Justin Sun-linked HTX for illegal crypto promotions
The UK Financial Conduct Authority (FCA) has launched legal action against HTX (formerly Huobi), linked publicly to Justin Sun, for repeatedly promoting crypto products to UK consumers in breach of the UK financial promotions regime that took effect in October 2023. The FCA says HTX continued advertising across platforms including TikTok, X, YouTube and Facebook despite prior warnings. Key issues cited are HTX’s failure to engage with the regulator, an opaque ownership and website-operator structure, and the risk that existing UK users continue to see unlawful promotions even after HTX restricted new UK registrations. The FCA has requested Apple, Google Play and social platforms to block or remove HTX’s UK-facing apps and accounts and has kept HTX on its public warning list; customers are not covered by the UK Financial Ombudsman Service and may not recover funds if the firm fails. This is the FCA’s first enforcement action under the crypto promotions regime, signalling tougher cross-border enforcement of financial promotion rules for crypto platforms — a development traders should watch for potential access restrictions, liquidity shifts and reputational effects on HTX and related tokens.
Bearish
This enforcement action targets HTX specifically and focuses on its UK-facing marketing and service access. Short-term impact: negative for HTX — potential user access restrictions (app/account removals), lower new sign-ups, and reputational damage can reduce deposit inflows and trading volume on the platform, leading to weaker liquidity and selling pressure on any HTX-linked tokens or assets directly associated with the exchange. Market participants may also reduce exposure to assets associated with prominent figures linked to HTX. Medium-to-long-term impact: depends on regulatory outcomes and remediation. If HTX is required to cease UK promotions and remains blocked from app stores and social channels, prolonged market access limitations could sustain lower volumes and confidence. Conversely, if HTX quickly complies, improves transparency and cooperates with the FCA, the adverse price impact may be limited and short lived. Overall, the news increases regulatory risk premia for HTX and related tokens, making the immediate price reaction likely negative for HTX-linked assets.