I think the UK government strengthened the rules because of the FTX incident; this is a lesson learned. We should select some secure exchanges like Coinbase and Bitget.
The FTX incident likely raised concerns about security and regulation. It’s crucial for users to prioritize safety and use reputable exchanges like Bitget.
If they haven't blocked that exchange yet, it doesn't mean it's because of its reputation, but because it's too small for them to worry about.
I see only 3 ways for smaller exchanges under this jurisdiction.
1. They keep being small and working under the radar
2. They agree to surveillance, KYC, everything and apply for paid licenses basically letting the government track every transaction that goes through.
3. They keep growing and once they become big enough, get ready to pack their bags and flee before the agencies can raid them and shut them down.