The United Kingdom’s financial regulator, the Financial Conduct Authority (FCA), recently warned local consumers about the operations of the Bitcoin Mercantile Exchange (BitMEX), a virtual currency derivatives exchange.
According to a notice published by the FCA on March 3, 2020, the independent financial regulator noted that BitMEX has been targeting UK residents without obtaining permission or approval to offer services.
The FCA stated:
“Almost all firms and individuals offering, promoting or selling financial services or products in the UK have to be authorized by us.”
The FCA confirmed that it holds the information which proves that BitMEX had been allegedly carrying out activities, which must be regulated and need approval from the agency.
The FCA’s duties include flagging companies and activities that are operating in an unlawful manner, which includes firms offering unapproved cryptocurrency products, including derivatives, which may pose high risks for local consumers.
In 2018, the FCA had noted that firms offering crypto-based derivatives products will have to obtain approval from the agency, because these financial instruments have to be regulated under the current laws.
The FCA is also reportedly planning to place a blanket ban on firms selling virtual currency derivatives such as exchange-traded notes, because these products are “ill-suited” to retail traders who might not be able to “reliably assess the value and risks of derivatives or ETNs that reference certain crypto assets.”
In statements shared with Coindesk, BitMEX’s management noted:
“We are working closely with our advisors to assess the situation. There is nothing more we can add at this time.”