The Financial Conduct Authority (FCA), the British financial watchdog preps to exercise a potential ban on the sale of crypto derivatives to retail investors, as per an official document released on July 1.
The document is titled “Restricting contract for difference products sold to retail clients,” and FCA revealed that they plan to publish a consultation paper (CP) on a potential ban on crypto derivatives such as bitcoin (BTC) futures and other crypto-related trading products.
The FCA wrote:
“We will shortly publish a CP on a potential ban on the sale to retail clients of derivatives and certain transferable securities that reference cryptoassets.”
The regulator further noted that this particular initiative followed public commitment within the UK Cryptoasset Taskforce Final Report published in July 2018, and updated in October 2018. The FCA added that the new rules will replace the final regulation of crypto-based contracts for difference (CFDs).
Crypto media outlet Crypto Briefing, added an FCA representative confirms that a ban will be “shortly” enforced over certain products related to crypto assets to retail investors. The spokesperson reportedly claimes:
“[W]e will be consulting on potentially banning the sale to retail customers of derivatives linked to certain cryptoassets this year.”
Another public policy statement the CFDs, the FCA considered CFDs “complex, leveraged derivatives” that are commonly offered to retail clients and represent excessive risk. The FCA adds that following their restriction, it expects retail investors to save from 267 million British pounds ($338 million) to as much as 451 million pounds ($570 million) on an annual basis.
FCA executive director of strategy and competition Christopher Woolard stated in 2018, hinting at a potential ban of crypto derivatives in his testimony at “The Regulation of Cryptocurrencies” event in London. As for now, the head of United Kingdom’s central bank questioned Facebook’s new Libra cryptocurrency could have genuine use cases if it can adapt to global regulatory demands.
Read more:US Lawmakers Asks Facebook To Freeze Their Progress Over Libra
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