UK Financial Conduct Authority Issues Warning to Poloniex Exchange

UK Financial Conduct Authority Issues Warning to Poloniex Exchange

The UK Financial Conduct Authority (FCA) has recently included Poloniex, a crypto exchange connected to Justin Sun, on its list of companies offering financial services without authorization. In an update released on December 6th, the FCA stated that Poloniex may be promoting financial services without their permission and advised individuals to avoid engaging with the firm. The FCA emphasized that the company lacked authorization to provide its product offerings to UK residents. Additionally, the regulatory body highlighted that those affiliated with Poloniex cannot seek recourse through the Financial Ombudsman Service and are not protected by the Financial Services Compensation Scheme. Despite attempts to gather a response from Poloniex, no comment has been received as of press time.

In recent months, the FCA has been actively revising its list of unlicensed cryptocurrency entities operating within its jurisdiction. Notable platforms such as Bitfinex, HTX, KuCoin, and Phemex have all been included on this list. According to FCA regulations, all financial enterprises operating in the UK must either be authorized or registered with the regulatory body.

The FCA’s warning about Poloniex comes at a particularly difficult time for the exchange, as many users have expressed frustrations with their inability to withdraw their assets from the platform. Following a $100 million hack in November, Poloniex temporarily halted deposits and withdrawals for its users. Although the exchange has made progress in restoring services, only certain tokens such as USDD, USDT, BitTorrent’s BTT, Sun Token SUN, and USDC have become available for withdrawal via the Tron Network as of December 5th. However, Poloniex has made a commitment to expand withdrawal services to major cryptocurrencies like BTC and ETH within the next two weeks.

As a result of the exchange’s difficulties, various cryptocurrencies are currently trading at a slight discount on rival platforms like Binance. For instance, data from Poloniex indicates that the BTC/USDT trading pair is priced at $43,028, whereas the same pair is exchanging hands for $43,229 on Binance at the time of writing. Similarly, Poloniex’s ETH trading pair is experiencing a discount of approximately $32 compared to that of Binance.

The FCA’s warning to Poloniex serves as a reminder of the regulatory requirements for financial enterprises operating in the UK. With the exchange facing challenges related to asset withdrawal and discounted cryptocurrency trading, it remains to be seen how Poloniex will navigate these obstacles and regain the trust of its users.

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