The United Kingdom has had an unpredictable stance on cryptocurrency, especially since their framework is not exactly friendly to the entire market. Cryptocurrency derivatives seem to have the harshest reputation, and the Financial Conduct Authority (FCA) in the UK may end up banning them.
Christopher Woolard, the executive director of strategy and competition for the FCA, held a speed at a London conference this week where he spoke about these derivatives. More specifically, he noted that the organization would be discussing the possibility of banning crypto contracts-for-difference (CFDs). According to Finance Magnates, this decision could end up including “options, futures, and transferable securities.”
In a statement to the news media site, Woolard said,
“We’re concerned that retail consumers are being sold complex, volatile and often leveraged derivatives products based on exchange tokens with underlying market integrity issues.”
Regulations in the UK have been problematic as they have responded slowly to the rise in crypto popularity. In fact, there have been multiple companies that criticized their lackadaisical pace and the intentions that they have noted, thus far.
Woolard also discussed the information found by the “Taskforce” the authority used, helping them to determine the best recommendations back in March. However, the concept of creating an outright ban on derivatives was not introduced until last month. By then, the group had divided crypto into three types – exchange tokens, security tokens, and utility tokens.
As far as the unauthorize use of tokens, Woolard expressed that they are going to adopt “one of the most comprehensive responses globally to the use of cryptoassets for illicit activities.” However, all of this attention has urged more consumers to both learn about and purchase cryptocurrency, so hopefully the FCA pays attention to these factors when determining their policy.