The British financial regulator may prohibit the sale cryptocurrency derivatives
The financial conduct authority UK (FCA) said it will consider whether to ban the sale of crypto-currency derivatives. This writes the Financial Times.
Unlike the cryptocurrency transactions on the spot market, trading and advising on cryptocurrency derivatives such as contracts for difference (CFDs), options and futures, are currently subject to regulation by the FCA and require official permission.
In a statement issued on Monday, October 29, the regulator noted: in the first quarter of 2019, he will begin consultations on the question whether in the future to ban the sale of crypto-currency derivatives.
The FCA also clearly expresses the opinion that cryptocurrency is “no intrinsic value”, so that “investors should be prepared to lose all of the value that they invested”. Therefore, management stresses that this asset class carries the “potential threats to financial stability.”
In parallel, the Department plans to begin debating whether to extend its jurisdiction over cryptocurrency assets, and infrastructure providers such as exchanges and services of wallets.
On the same day issued a statement of the Working group on cryptocurrency assets, which included representatives from the FCA, Treasury and Bank of England. The document States that the borrowed cryptocurrency derivatives is even more risky than trading on the spot market, because they can “cause the loss beyond the initial investment”, and also require additional fees.
The Financial Times notes that in General, the working group on cryptocurrency assets in favour of the “proportional” rules without “undue barriers”, particularly for retail investors.
According to the newspaper, the sale cryptocurrency derivatives were very profitable for London’s online trading platforms such as IG Group and Plus500.
Recently a group of business representatives presented a report sharply criticizing the members of Parliament for their “narrow and rigid approach” to the regulation of cryptocurrencies.