In a major regulatory escalation, the UK Financial Conduct Authority (FCA) has filed a lawsuit against HTX Exchange, the global cryptocurrency trading platform formerly known as Huobi and linked to Tron founder Justin Sun, for allegedly conducting unlicensed promotions and violating UK financial marketing laws.
The case marks one of the most high-profile enforcement actions yet by the FCA against a major crypto exchange, underscoring the regulator’s growing determination to bring digital asset companies under tighter compliance with British financial standards.
FCA Targets HTX for Breaching UK Marketing Rules
According to the FCA’s statement, HTX Exchange promoted crypto trading services to UK residents without obtaining the required authorization under Section 21 of the Financial Services and Markets Act (FSMA).
This section mandates that any financial promotion directed at UK consumers, including ads, websites, influencer campaigns, and social media posts, must be approved by an FCA-authorized firm.
The FCA lawsuit against HTX alleges that the exchange and its affiliates knowingly ignored these rules, conducting aggressive marketing campaigns across the UK despite multiple warnings from the regulator.
Justin Sun’s Connection Raises Regulatory Pressure
The FCA’s legal action also highlights the ongoing scrutiny surrounding Justin Sun, who is linked to HTX as an advisor and stakeholder. Sun, the founder of Tron (TRX) and owner of Poloniex Exchange, has faced multiple regulatory investigations across jurisdictions, including a U.S. SEC lawsuit filed in 2023 over alleged securities violations.
While Sun has denied direct operational control over HTX, his continued association with the brand has drawn regulatory attention in key markets such as the United States, Europe, and now the United Kingdom.
Analysts believe that the FCA’s move could be part of a wider crackdown on offshore exchanges marketing to UK users, following similar actions taken against Binance, Bybit, and KuCoin in recent years.
FCA’s Broader Crypto Enforcement Agenda
The FCA has repeatedly warned that crypto asset promotions must comply with strict disclosure, transparency, and risk warning requirements.
Since new rules took effect in October 2023, all crypto firms promoting services to UK consumers must:
- Display clear risk warnings about potential losses.
- Avoid misleading claims or high-yield promises.
- Ensure promotions are approved by FCA-authorized entities.
Market Reaction and Global Implications
Following the lawsuit’s announcement, HTX’s native token (HT) saw a sharp decline in trading volume, and Tron’s TRX token briefly fell by 3% amid fears of heightened regulatory scrutiny.
Market observers say the case could have a chilling effect on foreign exchanges targeting UK clients without proper authorization. It may also push crypto marketing agencies and influencers to conduct stricter due diligence before promoting exchange services.
If the FCA succeeds, it could set a precedent for similar cross-border enforcement actions across Europe, where regulators are coordinating to enforce MiCA-compliant crypto marketing standards starting in 2025.
FAQs
Q1: Why is the FCA suing HTX Exchange?
The FCA alleges that HTX promoted crypto trading and investment products to UK users without authorization, breaching the Financial Services and Markets Act.
Q2: What is Justin Sun’s connection to HTX?
Justin Sun is linked to HTX as an advisor and investor. Although he claims not to be directly managing the exchange, regulators have cited his influence as a concern.
Q3: What are the FCA’s rules on crypto promotions?
Since October 2023, all crypto firms marketing to UK consumers must have their promotions approved by an FCA-authorized entity and include detailed risk disclosures.
Q4: What penalties could HTX face?
If found guilty, HTX could face fines, a UK operations ban, and potential restrictions on accessing UK payment systems or local partnerships.
Q5: How does this affect UK crypto investors?
Investors are urged to verify whether an exchange is FCA-authorized before trading, as unauthorized platforms offer limited protection against fraud or insolvency.