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The UK monetary watchdog has filed a lawsuit in opposition to the crypto trade linked to Justin Solar, a Chinese language-born billionaire who has invested hundreds of thousands of {dollars} in US President Donald Trump’s digital asset ventures.
The Monetary Conduct Authority mentioned that it had filed the lawsuit in opposition to HTX within the Excessive Courtroom this week “for unlawfully selling cryptoasset companies to UK shoppers in breach of the UK’s monetary promotions regime”. It’s the first time the UK regulator has taken such motion in opposition to a crypto firm.
“This motion is a part of our dedication to guard shoppers and uphold the integrity of UK monetary markets,” the FCA mentioned, with out offering extra particulars of its lawsuit.
“Now we have seen crypto companies react positively to our monetary promotions guidelines and regulation, nonetheless the place we nonetheless see poor practices we won’t hesitate to take motion the place companies look like breaching our guidelines,” it mentioned.
Sun is a well-known crypto entrepreneur who has skilled brushes with legislation enforcement previously. He’s an adviser to HTX and runs the crypto firms BitTorrent and Tron, which has the TRX token.
Solar spent $75mn on tokens issued by the Trump household’s crypto firm World Liberty Monetary shortly earlier than a separate US lawsuit in opposition to him and three of his firms for alleged wash buying and selling — a type of market manipulation — was paused this yr.
He additionally flew on Jeff Bezos’ spacecraft in August and final yr turned notorious for getting and eating a $6mn banana as a part of an artwork set up in Hong Kong.
HTX didn’t instantly reply to a request for remark.
The FCA has included HTX, in addition to its previous incarnation Huobi, on its warning listing of firms that it believes are in search of to draw UK shoppers with out having the required authorisation.
The UK regulator requires crypto firms to register with it earlier than they’re authorised to hold out enterprise within the nation — however HTX is just not among the many virtually 50 teams to have carried out so. The registration process requires checks on monetary crime and anti-money laundering controls.
In 2023, Solar and his firms have been sued by the US Securities and Change Fee for alleged fraud, together with for allegedly participating in wash buying and selling. In February, a federal courtroom accepted the SEC’s and Solar’s request to pause the case. Solar had denied the allegations and had sought to have the case dismissed.
Solar has spent hundreds of thousands of {dollars} on shopping for the US president’s memecoin, turning into its high holder and securing an invitation to the White Home and Trump’s Virginia golf membership in Might. He later pledged to purchase $100mn extra of the memecoin. In June, World Liberty Monetary started minting its token USD1 on Tron’s trade, boosting its volumes and charges.
Tron went public on Nasdaq this yr in a reverse merger, and is shopping for and holding the TRX token, turning into one in every of a whole lot of so-called crypto treasury firms.
Further reporting by Alistair Grey in London
