The British Financial Conduct Authority (FCA) has ordered the London Underground to take down advertisements for startup Zeux – a company that uses stablecoins as part of a high-interest savings offering.
The FCA appears to have expressed concern that Zeux’s business model involves using customer investments to buy stablecoin holdings “before being transferred to a financial services provider in China,” per British newspaper The Daily Telegraph.
Zeux had paid for London Underground advertisements to promote its 5% interest product for savings investors for customers who have lost “interest in their bank.”
However, the regulator objected to the fact that the ads made no reference to the fact that customer funds would be converted from fiat to stablecoins before, as the Telegraph states, “being transferred to a financial services provider in China.”
The blockchain startup has also allegedly violated British financial regulations by failing to obtain required permits.
Per the Zeux website, the company “uses stablecoins as an intermediary to reduce transaction and clearing costs and to help UK customers to get access to global products that they previously had no access to.”
The company makes no mention of which stablecoins it uses in the FAQ section of its website.
The regulator stated that Zeux was authorized to “carry out account information services and payment initiation services,” but does not have the necessary permits to “hold customer money.”
