The United Kingdom Wants to Ban Crypto Derivatives for Retail Investors

Wilfred Michael 

Wilfred Michael

News reporter

02 July 2019,
The United Kingdom Wants to Ban Crypto Derivatives for Retail Investors

The United Kingdom’s Financial Conduct Authority (FCA) is contemplating a potential ban on the offering of crypto derivatives to retail investors, as per a document released by the regulators on July 1.

The 51-page document titled “Restricting contract for difference products sold to retail clients,” confirms that the FCA would soon publish a consultation paper seeking public comment regarding the potential ban.

A section of the FCA report reads,

“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 move would reportedly affect any existing or potential retail CFD investors as well as firms that sell such products to them.

The FCA goes further to tell that the move is as a result of earlier findings published in July 2018 and updated in October by the U.K Crypto Assets Taskforce assigned to monitor the growth of the new industry.

Moving forward, any of the measures to be proposed in the upcoming consultation paper would seek to address “poor conduct by UK and EEA firms offering a crypto-related contract for difference (CFD) to retail consumers,” the release notes.

The FCA wants to reduce consumer harm by limiting the sale of these CFDs and other directly substitutable products with excessive risk features. They, however, did not provide a timeline regarding when it would publish the said consultation paper, but only remarked that it would “replace [our] final measures restricting how CFDs referencing cryptocurrencies are sold to retail clients.”

Meanwhile, in another report regarding crypto derivates, confirmed earlier today that prominent cryptocurrency exchange, Binance plans to roll out crypto futures trading options in the coming weeks.


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