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UK Authorities Arrest Crypto Exchange’s Co-Founders Over Illicit Operations

2 mins
Updated by Daria Krasnova
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In Brief

  • UK FCA arrests crypto exchange co-founders for unregistered $1.26 billion operations.
  • Authorities search premises, seize devices; suspects released on bail.
  • FCA emphasizes strict enforcement against illicit crypto activities.
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The UK Financial Conduct Authority (FCA), collaborating with the Metropolitan Police Service, apprehended two co-founders of a crypto exchange. They are suspected of operating an unregistered business that handled over £1 billion (approximately $1.26 billion) in crypto assets.

This operation highlights the efforts to tackle illicit transactions in the crypto sector.

UK FCA Investigates The Unnamed Individuals

Authorities conducted detailed inspections at the business premises linked to the suspects, aged 38 and 44. They also searched two residential properties in London, seizing several digital devices.

Following these actions, both individuals were interviewed under caution and subsequently released on bail. However, the FCA has not shared information about the individuals’ or their firms’ names. The FCA’s ongoing investigation emphasizes the complexity of the case.

Read more: Crypto Regulation: What Are the Benefits and Drawbacks?

In the UK, crypto exchanges must register with the FCA and adhere to the country’s anti-money laundering regulations. This requirement highlights the FCA’s commitment to maintaining financial integrity and preventing the crypto market from becoming a conduit for illicit activities.

Therese Chambers, Executive Director of Enforcement and Market Oversight at the FCA, reinforced the agency’s dedication to its role.

“The FCA has an important role to play in keeping dirty money out of the UK financial system. These arrests show we will do everything in our power to stop crypto firms from operating illegally in the UK,” Chambers said.

Industry veteran and UK Lawyer Cal Evans shares this vision. Evans told BeInCrypto that the arrests made for the operation of unregistered crypto exchanges are a clear sign that the FCA and the UK Crown Prosecution Service are taking the rules around crypto registration and licenses seriously.

“The UK established a solid framework for companies that are looking to provide crypto related services, even advertising within the UK. Although they are what many would consider ‘cumbersome’ we have to remember that these rules are also designed to protect the UK financial market, which is one of the largest in the world. The only reason not to comply with it, is if you intend on not following the rules. Any exchange, advertiser, or party that is operating in crypto in the UK should retain counsel and become registered with the FCA,” Evans stated.

Read more: How Does Regulation Impact Crypto Marketing? A Complete Guide

Moreover, this incident is not the FCA’s first action against non-compliance. In October 2023, the FCA imposed a $7.8 million fine on ADM Investor Services International. Regulators penalized this New York City-based commodities broker for failing to meet anti-money laundering standards.

Since October, the FCA has intensified its regulatory framework, particularly concerning the marketing of crypto assets. Any firm promoting cryptoassets to UK customers without adherence to the new guidelines faces severe penalties.

These include unlimited fines or imprisonment for up to two years. In line with these regulations, the FCA also provided examples on its website illustrating good and poor practices in preparation for enforcing these marketing rules.

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Harsh Notariya
Harsh Notariya is a journalist at BeInCrypto, who writes about various topics, including decentralized physical infrastructure networks (DePIN), tokenization, crypto airdrops, decentralized finance (DeFi), meme coins, and altcoins. Before joining BeInCrypto, he was a community consultant at Totality Corp, specializing in the metaverse and non-fungible tokens (NFTs). Additionally, Harsh was a blockchain content writer and researcher at Financial Funda, where he created educational reports on...
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