FCA Flags Poloniex: Affiliation with Justin Sun Raises Concerns

<p>The
Financial Conduct Authority (FCA) in the United Kingdom has included Poloniex,
a crypto exchange, in its list of non-authorized companies, citing concerns
about the platform's affiliation with entrepreneur Justin Sun, who has seen
three of his companies suffer four hacks in the past two months. </p><p>Poloniex's
$100 Million Hack: Restoration and Resumption of Services</p><p>The
FCA's warning, issued on December 6, emphasizes that unauthorized entities
cannot promote financial services in the UK, and individuals may not have
financial law protection when dealing with such entities.</p><p>In
August, the FCA disclosed that, since 2020, it has received 291 applications
from crypto companies seeking registration, approving only 38. In October, <a href="https://www.financemagnates.com/cryptocurrency/fca-targets-143-entities-including-major-crypto-exchanges-huobi-and-kucoin/">143
crypto companies, including HTX and KuCoin</a>, were added to its warning list.
In the case of both Huobi and KuCoin, two cryptocurrency exchanges originating
from Asia, the FCA warning message was the same:
"This firm may be promoting financial services or products without our
permission. You should avoid dealing with this firm." The regulator <a href="https://www.financemagnates.com/cryptocurrency/paypal-gains-approval-to-offer-crypto-services-in-the-uk/">has
authorized only one entity since then – PayPal UK</a>.</p><p>Poloniex,
which experienced a $100 million hack on November 10, has completed most of its
restoration efforts and resumed deposit and withdrawal services for specific
cryptocurrencies via the Tron network on December 5. Tron founder Sun, who also
owns HTX, has seen his platforms endure four hacks in the last two months,
resulting in significant losses. </p><p>Despite
attempts to enhance security, the resumption of services for more
cryptocurrencies on Poloniex will be implemented gradually, according to the
company's official statement.</p><p>New
Guidance Targets Crypto Promotions to UK Consumers</p><p><a href="https://www.financemagnates.com/">Finance Magnates</a>
reported earlier that <a href="https://www.financemagnates.com/cryptocurrency/fca-unveils-fresh-guidance-amidst-crypto-marketing-turmoil-in-the-uk/">the
FCA had updated guidance for cryptoasset firms</a>, extending oversight to
crypto promotions targeting UK consumers. The rules, aiming to enhance consumer
awareness of crypto investments, address compliance issues, with over 200 firms
initially falling short of requirements. </p><p>The FCA's guidance, born out of industry consultation,
aligns with the "Consumer Duty" act for authorized firms, emphasizing
conformity with high-risk investment rules. The FCA, recognizing the dynamic
crypto sector, commits to engagement and periodic guidance reviews. </p><p>While cautioning about crypto's high-risk nature, the FCA
issues rules for distinguishing good and poor marketing practices. A
transitional period until January 8, 2024, is provided for firms to implement
technical aspects of the new rules. The FCA plans a Discussion Paper on
stablecoin regulation, underscoring its commitment to adapting regulations to
the evolving crypto market.</p>

This article was written by Tareq Sikder at www.financemagnates.com.