British FCA adds Poloniex to warning list, says exchange offers services without permission

The Financial Conduct Authority has included the Poloniex crypto exchange in its warning list after $100 million hack.

Cryptocurrency exchange Poloniex, owned by TRON founder Justin Sun, has been included in the Financial Conduct Authority’s (FCA) warning list, following a $100 million hack, which the exchange suffered in late November 2023.

As per a warning page published on Dec. 6, 2023, Poloniex “may be promoting financial services or products” without FCA’s permission. The British regulator urged users to avoid dealing with the exchange, adding the trading platform “may be targeting people in the U.K.”

Poloniex on FCA’s warning list | Source: FCANovember 2023 has witnessed a significant surge in financial losses due to crypto hacks, with the total amount of losses surpassing $300 million. This surge was particularly driven by the $100 million hack of Poloniex, where hackers infiltrated the exchange’s hot wallet, leading to a substantial unauthorized withdrawal of assets. This breach is notable as this was the second-largest private key compromise of the year.

In May 2023, Poloniex agreed to pay $7.6 million to settle charges that it permitted users in sanctioned nations to trade digital assets on its platform. According to the U.S. Treasury’s Office of Foreign Assets Control, the crypto exchange processed over 65,000 transactions totaling more than $15 million for customers in sanctioned regions in a period between 2014 and 2019, even though the platform processed know-your-customer (KYC) information and IP address data.