UK regulator proposes to ban crypto derivatives for retail investors
The UK Financial Conduct Authority (FCA) said Wednesday that it is advising on the possibility of a total ban on “selling, promoting or distributing to all retail consumers” of derivatives such as CFDs, ETNs, options and futures linked to “unregulated, available for transfer to cryptocurrency assets “, firms registered or operating in its jurisdiction.
The regulator motivates its proposal by various factors, including the lack of a “reliable basis for valuation” of cryptocurrency assets, the prevalence of manipulations and financial crimes in the secondary market, the extreme volatility of these markets and the lack of awareness among retail investors. According to FCA, there is no “obvious investment need” for financial products related to cryptocurrencies.
“We estimate the potential benefit for retail consumers from a ban on these products in the range of £ 75 million to £ 234.3 million per year,” the press release said..
Also at the beginning of the week, FCA announced the introduction of new restrictions on the offer of CFDs and similar instruments to retail investors. According to the announcement, the maximum leverage for cryptocurrency CFDs can be 2: 1.
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