HTX and FCA seek settlement in UK crypto marketing lawsuit

HTX and the UK Financial Conduct Authority have entered settlement talks over allegations that the crypto exchange illegally promoted its services to British consumers, with High Court proceedings paused until late August while negotiations continue.

Reuters reported on Aug. 13, citing court documents, that the FCA and HTX have been given another two months to seek a settlement after the two sides began exchanging emails in March and initially held three months of negotiations.

The discussions concern a lawsuit filed by the FCA in October against Panama-incorporated Huobi Global and unidentified people alleged to operate and control HTX. In February, the regulator accused the exchange of breaching financial promotion rules that have applied to cryptoassets in the UK since October 2023.

HTX, formerly known as Huobi, is one of the world’s largest crypto trading platforms and has been linked to Tron founder Justin Sun, who acquired a controlling interest in the exchange in 2022. The company is also dealing with separate sanctions imposed by the UK and European Union while maintaining that its services are not intended for British customers.

HTX and FCA have extended settlement talks

Court orders reviewed by Reuters show that discussions between HTX and the FCA began after months of unsuccessful attempts by the regulator to engage with the exchange.

The FCA had alleged that HTX ignored repeated requests to communicate and operated through what the regulator described as an “opaque operational structure.” Following email exchanges in March, however, the two sides entered settlement discussions that initially ran for three months.

On June 25, the High Court granted another two-month extension, putting the current negotiation period on course to expire in late August. Proceedings have been halted during that period to allow the parties to continue talks.

Neither side has disclosed what a possible settlement could involve. The FCA and HTX declined to comment to Reuters on the status of the negotiations, while lawyers representing HTX did not respond to requests for comment.

Asked separately about the regulatory discussions, legal proceedings and their timetable, HTX also declined to provide details.

“HTX remains dedicated to upholding high standards of compliance, transparency, and user protection,” a spokesperson told Reuters, adding that the company would continue working collaboratively with regulators.

An undated notice published on HTX’s website states that its products and services are not intended for users in the UK.

FCA case targets HTX crypto promotions in the UK

The lawsuit is the FCA’s first court case against a crypto company over the marketing of services to British consumers, according to Reuters.

UK financial promotion rules for cryptoassets took effect in October 2023 and restrict how companies can market crypto products to consumers in the country. The requirements apply to promotions made through websites, apps and other online channels capable of reaching British customers.

Crypto companies seeking UK customers must also register with the FCA where required and undergo anti-money laundering and financial crime checks. HTX and Huobi were added to the FCA’s warning list of unauthorized firms in 2023 and 2024, respectively.

The regulator uses the list to alert consumers about companies that may be providing financial services or targeting UK customers without the required authorization.

The FCA has also tried to restrict HTX’s access to British users through third-party platforms. According to Reuters, the regulator has urged social media companies to block HTX accounts for UK-based users and pushed for its products to be removed from UK app stores.

Enforcement against unauthorized crypto services has extended to other platforms. In June, the FCA warned about Hyperliquid after saying the decentralized perpetual futures platform and related entities may be providing or promoting financial products and services in the UK without authorization.

The regulator has also pursued suspected unauthorized crypto activity offline. A June crypto.news report detailed how the watchdog raided eight London sites as part of an investigation into suspected illegal peer-to-peer crypto trading.

The operation involved the FCA, HM Revenue and Customs and the Metropolitan Police, with authorities issuing stop notices while investigating potential anti-money laundering and counter-terrorist financing breaches.

UK and EU sanctions have added pressure on HTX

HTX’s regulatory position in Britain became more complicated in May when the UK government sanctioned Huobi Global S.A. as part of measures targeting financial networks accused of supporting Russia.

As previously reported by crypto.news, the UK designated Panama-registered Huobi Global S.A. on May 26 in a sanctions package targeting the Russia-connected A7 network.

The UK notice listed HTX and HTX Exchange among names associated with the sanctioned entity. Measures included an asset freeze, payment-processing restrictions, internet service sanctions, and trust services restrictions.

A day later, HTX disputed the sanctions scope, arguing that Huobi Global S.A. was a separate legal entity and that the designation did not apply to its operating exchange or affect customer assets.

The UK Foreign Office had accused the sanctioned company of providing financial services connected to A7 Limited Liability Company and Garantex Europe OU. British authorities said they had reasonable grounds to suspect that the services supported Russia.

Compliance effects spread to crypto users and service providers following the designation. In June, blockchain researchers reported that some platforms were flagging wallets with previous connections to Huobi or HTX, creating additional checks for funds that had passed through the exchange.

A Global Ledger analysis cited at the time found that HTX processed about $21.06 billion in high-risk crypto flows between 2021 and May 2026, including $7.64 billion linked to Russian high-risk entities and darknet markets. Blockchain investigator ZachXBT criticized the impact of address screening, arguing that ordinary users could face restrictions because of historical exposure to HTX-linked wallets.

The sanctions pressure expanded in July when the European Union placed HTX on a list of crypto companies accused of helping Russian users evade financial restrictions. The EU sanctions action covered 18 crypto companies and formed part of the bloc’s latest measures against Russia.

UK crypto firms face a new authorization regime

The FCA’s action against HTX is being pursued under rules already applicable to crypto promotions and financial crime controls while Britain prepares a more extensive regulatory system for the sector.

In April, the regulator opened its final consultation covering stablecoin issuance, crypto trading platforms, custody and staking.

Under the timetable published with the consultation, crypto companies will be able to apply for full FCA authorization from Sept. 30, 2026, before the new regulatory framework takes effect in October 2027.

Some companies have already obtained registration under the existing anti-money laundering regime. Robinhood’s UK subsidiary, for example, was registered by the FCA on July 31, allowing it to provide crypto services in Britain under the current framework.

For HTX, the existing High Court proceedings remain paused under the June 25 court orders while settlement discussions with the FCA continue through late August.