British Regulator Proposes a Ban on Retail Sales of Crypto Derivatives

Retail investors in the U.K. won’t be able to purchase crypto derivatives in the future, if the Financial Conduct Authority (FCA) gets its way. The financial watchdog wants to ban the sale of derivatives to retail investors in a bid to protect them, according to a document published today, July 3, 2019. 

The financial watchdog argues that the products are not suited for retail investors, who typically lack the wherewithal to assess the risks involved.

“The FCA is therefore consulting on banning the sale, marketing and distribution to all retail consumers of all derivatives (i.e., contract for difference — CFDs, options and futures) and ETNs [exchange-traded notes] that reference unregulated transferable crypto assets by firms acting in, or from, the U.K.,” the document reads. 

The agency expressed optimism over the potential effects of the ban, claiming that retail consumers could save as much as “£75 million to £234.3 million a year” if derivatives are banned.The FCA has a long-standing issue with crypto derivatives. Last year, the financial watchdog announced its concerns, stating that retail investors were being sold a pile of “complex, volatile and often leveraged derivatives products” with “market integrity issues.”

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