FCA, HTX race to settle first crypto marketing case by Aug 31

The UK's Financial Conduct Authority and HTX, the crypto exchange formerly known as Huobi, are in settlement talks over the first-ever enforcement action against a crypto firm for illegal marketing to British consumers.

The UK Financial Conduct Authority and HTX are racing to settle the first crypto marketing enforcement case, with London's High Court pausing proceedings until late August. The lawsuit, filed in October 2025, alleges the exchange breached section 21 of the Financial Services and Markets Act by promoting crypto services to UK consumers without authorization.

"As the first-ever enforcement action of its kind against an offshore exchange, these High Court proceedings effectively demonstrate that the FCA is serious about shielding UK retail consumers from unapproved financial risk, and that its reach can extend to anyone marketing to UK citizens," Nick Jones, founder and CEO of crypto firm Zumo, said.

The FCA's case targets Panama-incorporated Huobi Global S.A. and four categories of "persons unknown," including whoever owns or controls htx.com and whoever runs its social media accounts. Justin Sun, who acquired a controlling stake in the exchange in 2022, is not named in the proceedings. The regulator demonstrated that a staff member using a UK IP address and driving license could register on the platform, buy crypto through its peer-to-peer service, and execute futures trades on two pairs. HTX was added to the FCA's warning list in October 2023, the same day stricter crypto marketing rules took effect, and again in 2024.

The settlement talks run alongside separate UK and EU sanctions imposed on HTX and Sun earlier this year over alleged involvement in facilitating Russian sanctions evasion. The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, effective October 2026, will bring a range of crypto activities into the FCA's regulatory perimeter for the first time, expanding oversight beyond AML registration and financial promotions rules.

Sanctions and market impact

Binance will stop all deposits and withdrawals involving HTX and ten other platforms starting August 23, 2026, due to sanctions related to Sun and ties to Russia, a move that has already reduced liquidity in HTX's ETH trading book. The FCA has also urged social media companies to remove HTX products from UK app stores and block accounts for UK-based users. HTX ads ran on X, Telegram, Facebook, TikTok, YouTube and LinkedIn, according to the regulator.

The outcome of the settlement talks could set a precedent for how the FCA pursues similar enforcement actions against other offshore exchanges that fail to comply with UK promotion rules. Crypto firms seeking British customers must register with the FCA and submit to anti-money laundering and financial crime checks. The rules, effective October 2023, also require risk warnings and suitability checks on advertisements.

Both sides have until late August to reach terms. A settlement would avoid what could have been a lengthy and precedent-setting trial over the boundaries of crypto marketing regulation in the UK.

This article is for informational purposes only and does not constitute investment advice.