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Earlier this week, the conduct authority in the United Kingdom made the decision to ban crypto futures which finally went into effect.The ban was announced towards the end of 2020 by the authority following after a lot of thought being put into it.
Earlier this week on the 6th of January, the financial conduct authority in the United Kingdom made the decision to ban crypto futures and exchange-traded notes which finally went into effect in the country.
The ban was actually announced towards the end of 2020 in October by the authority following after a lot of thought being put into it over the course of around 12 months. During this period, the authority argued that crypto derivatives were not properly suited for retail investors and that they were at risk of losing out big time.
Ian Taylor, the chair of the self-regulated CryptoUK group commented on the decision saying:
“The regulator is clearly focused on consumer protection, and rightfully so. Derivatives allow for leverage — enabling investors to magnify their gains, but equally their losses. The FCA has raised concerns about retail investors being exposed to significant losses and volatility, that they may not fully appreciate.”
Taylor went on to criticise the characterisation of the authority for retail crypto derivative investors as “unsophisticated“. Furthermore, he added that the authority could have gone further for stricter leverage limits rather than putting over a complete blanket ban in the UK.
For those that don’t know, with this new ban in place crypto derivatives can no longer be included in individual savings accounts. When the ban was initially announced last year, critics were quick to highlight the negative impact that this could have for cryptocurrency adoption in the United Kingdom. One crypto analyst at eToro, Simon Peters has said:
“In my experience working with our higher equity U.K. clients at eToro, most want to hold the actual crypto-asset rather than trading a derivative such as a CFD, as they recognize the utility of holding the underlying crypto asset.”
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Title: UK FCA Crypto derivatives ban finally comes into effect
Sourced From: cryptodaily.co.uk/2021/01/uk-fca-crypto-derivatives-ban-finally-comes-into-effect
Published Date: Thu, 07 Jan 2021 16:31:39 +0000
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