FCA and HTX in Settlement Talks Over Historic UK Crypto Marketing Enforcement

Settlement Negotiations Underway

The UK’s Financial Conduct Authority and the cryptocurrency exchange HTX are currently negotiating a settlement regarding allegations of illegal crypto promotions directed at British consumers, according to court filings reviewed by Reuters. The High Court has halted proceedings until late August to allow both parties sufficient time to reach an agreement. This marks a significant moment in regulatory enforcement, as the FCA filed what is believed to be the first enforcement action of its kind targeting a crypto exchange specifically for unauthorized marketing practices. The regulator initiated proceedings in the Chancery Division in October 2025, with the formal claim made public in February 2026.

Building the FCA’s Case

The FCA’s enforcement action centers on violations of Section 21 of the Financial Services and Markets Act, which prohibits unauthorized financial promotions. The regulator seeks both an injunction and a declaration that the exchange’s operations constitute a breach of this provision. To establish its case, the FCA documented that UK-based consumers maintained the ability to trade on HTX despite the exchange’s stated restrictions. In one instance, an FCA employee operating from a UK internet protocol address successfully purchased cryptocurrency through the exchange’s peer-to-peer service and executed futures trades across two trading pairs, using only a UK driving license for identity verification. The regulator also pointed to the platform’s English language interface, its acceptance of British pounds, recognition of UK identification documents, and terms of service that purport to restrict only derivatives trading—though without technical enforcement preventing futures participation.

The defendants named in the claim include Huobi Global S.A., a Panamanian company established in May 2023, alongside four undefined categories of parties, including anyone who assumes operational control before October 31, 2028. Justin Sun, who acquired controlling interest in 2022, was not named as a defendant.

Wider Regulatory Pressures

Beyond the FCA’s marketing-focused enforcement, HTX faces sanctions from multiple jurisdictions. The United Kingdom has imposed sanctions on both the exchange and Justin Sun individually, citing alleged connections to Russian sanctions evasion efforts. The European Union similarly added HTX to its Russia-related sanctions measures. The timeline of regulatory pressure has escalated incrementally: HTX appeared on the FCA’s official warning list in October 2023, immediately when updated rules took effect, and the exchange did not respond to a formal letter before action sent in August 2025.

Negotiations between the FCA and HTX began following email exchanges in March, with formal settlement discussions opening for a three-month period. Both sides agreed to extend talks by an additional two months as of June 25, 2026. Neither the FCA nor HTX has commented publicly on the settlement discussions, though an HTX representative indicated the exchange remains committed to compliance efforts.

This precedent-setting case could reshape how regulators worldwide approach crypto exchange marketing practices and geographic compliance, establishing standards that ripple through the broader industry.

Source: FCA, via Decrypt. Not financial advice.