FCA Takes Legal Aim at Justin Sun-Linked HTX Exchange

October 23, 2025 • FinTech News

The UK’s Financial Conduct Authority (FCA) has launched a civil lawsuit against HTX — the cryptocurrency exchange formerly known as Huobi — alleging that it unlawfully marketed digital asset services to British consumers. The move represents one of the most significant post-Brexit regulatory tests for the global crypto sector, as the FCA steps up enforcement against unlicensed operators targeting UK users.

Details of the Lawsuit

Filed in London’s High Court, the FCA’s suit accuses HTX and several unnamed associates — including owners, operators, and marketing executives — of breaching the UK’s Financial Promotions Regime, which was updated in 2023 to impose stricter advertising and authorization requirements on crypto companies.

The FCA confirmed that HTX “has not obtained authorization to operate within the UK,” effectively making any crypto-related promotional activity aimed at UK users illegal under the new regime. The case also names related entities such as Huobi Global and multiple individuals described as “persons unknown,” a legal formulation intended to cover offshore or pseudonymous actors.

An FCA spokesperson emphasized that the action is part of the regulator’s ongoing mission to “protect consumers and uphold the integrity of UK financial markets.” HTX, as of publication, has not issued an official comment.

The Justin Sun Connection

HTX’s most visible adviser is Justin Sun, the founder of the TRON blockchain and a seasoned crypto entrepreneur. Sun’s influence in the exchange’s operations, though not directly cited in the lawsuit, is under intense scrutiny due to his expanding business ties, including a $75 million investment in World Liberty Financial, a crypto venture backed by members of President Donald Trump’s family.

Sun’s links to both HTX and World Liberty Financial have drawn regulatory and public scrutiny throughout 2025. Earlier this year, the U.S. Securities and Exchange Commission temporarily paused its separate investigation into Sun and three of his companies over alleged “wash trading” practices. Around the same time, blockchain data showed a wallet tagged “SUN” as one of the largest holders of Trump-branded TRUMP memecoins and World Liberty tokens.

FCA’s Regulatory Crackdown Intensifies

This case against HTX forms part of a broader, aggressive posture by the FCA in 2025. The regulator has reportedly issued warnings against more than 400 crypto exchanges since January, many of which are accused of promoting services to UK consumers without registration.

The FCA’s financial promotion rules — implemented in October 2023 — require firms offering or advertising digital assets in the UK to gain explicit authorization or approval. Marketing crypto to UK audiences without such approval can lead to criminal prosecution or substantial financial penalties.

The FCA’s recent court filing comes just months after the regulator levied fines on several smaller exchanges for non-disclosure of sponsorship and influencer marketing campaigns promoting high-risk tokens. The HTX case, however, signals a shift from fines to direct legal prosecution, underlining the seriousness of the violation.

Industry Implications and Market Reactions

The lawsuit against HTX has sent a chill through the crypto industry, illustrating that the FCA is prepared to use the full force of civil litigation to enforce compliance.

Legal and Compliance Precedent:
If the FCA prevails, the case could set a powerful precedent establishing accountability for global exchanges even when they operate primarily offshore. It would reaffirm that any firm targeting UK consumers — regardless of domicile — falls within the jurisdiction of British consumer protection and advertising laws.
Consumer Trust and Market Integrity:
The FCA’s move underscores its focus on establishing the UK as a credible crypto hub built on transparency and compliance. The case could bolster the confidence of institutional investors who have so far hesitated to engage with the crypto sector due to reputational and regulatory risks.
Industry Unease Over Targeting Individuals:
By including unnamed “persons unknown,” the regulator implicitly signals that promotional heads and key executives may face personal liability. This could introduce a chilling effect on international marketing efforts by decentralized crypto projects, forcing firms to adopt localized compliance strategies.

Justin Sun’s Ongoing Regulatory Shadow

For Justin Sun, the FCA’s action adds another layer of strain. Once hailed as a crypto wunderkind, Sun’s reputation has grown increasingly polarizing. He serves as an adviser to World Liberty Financial (WLFI), a Trump-linked stablecoin venture. However, internal clashes have surfaced between Sun and WLFI leadership — most notably when WLFI blacklisted Sun’s own wallet address, freezing $75 million worth of tokens and representing 99.9% of all blacklisted assets on the project.

These disputes add to a complex matrix of legal exposure for Sun, who has faced scrutiny from regulators in the U.S., Singapore, and now the UK. His high-profile investments in politically charged crypto ventures amplify concerns about the intersection between global finance, digital assets, and political influence.

Broader Impact on the UK Crypto Ecosystem

From an analytical standpoint, the HTX lawsuit signifies that the honeymoon phase of crypto in the UK is over. Since the implementation of post-Brexit financial reform, the UK aims to position itself as a regulated digital asset center, balancing innovation with investor protection.

This tightening of oversight coincides with a global trend: the U.S. Commodity Futures Trading Commission and the European Union’s ESMA have similarly initiated actions against overseas exchanges targeting domestic users. The UK’s move against HTX will likely embolden other jurisdictions to enforce similar cross-border measures.

While this may create short-term uncertainty, it also raises the bar for legitimate exchanges like Coinbase, Kraken, and Gemini, which have engaged with UK regulators to ensure compliance. As a result, compliant operators could benefit from reduced competition and higher consumer trust.

Fintech Outlook: Integration or Isolation?

For fintech and digital asset players, the HTX development is a wake-up call. The FCA’s zero-tolerance approach shows that the UK is no longer content with post-event enforcement; it wants pre-approval and real-time accountability.

Expect to see:

Increased lobbyingfrom crypto industry groups pushing for “sandbox-friendly” amendments to promotional laws.
Migration of unregistered exchangestoward decentralized models or to less-regulated jurisdictions like Dubai or Seychelles.
Expansion of compliance tech, as regtech and AI-based compliance monitoring tools become indispensable for exchanges targeting UK and EU users.

Investors, meanwhile, may view this as a realignment moment — separating speculative or politically-tied ventures from legitimate, regulated financial infrastructures.

Predictions for 2026 and Beyond

By mid-2026, the FCA’s verdict could reshape global crypto operations:

If the FCA succeeds, global exchanges will be forced to institute geo-fencing, local compliance officers, and promotional pre-clearance systemsfor the UK market.
Should HTX counter successfully, it could embolden offshore exchanges to continue aggressive marketing under “informational” loopholes.
Over the longer term, expect the UK Parliamentto expand existing promotion laws into a comprehensive Crypto Conduct Framework, merging consumer protection, advertising, and anti-money laundering measures.

At its core, this lawsuit marks the defining moment when the UK’s strategy toward crypto regulation evolved from guidance to governance. Whether HTX becomes the first major casualty or a resilient test case, the legal outcome will echo across every fintech, digital asset platform, and compliance department with a footprint in Britain.