The Economist Talks Banning of Crypto Derivatives by Global Financial Regulators


On September 24th the price of Bitcoin tanked from near highs of $10,000 USD to below $9,000 USD in a couple of minutes. The huge drop in BTC led to over $600 million USD in long positions on BitMex exchanges being liquidated. With such volatility being experienced on BTC’s price, an article published on the Economist suggests regulators will soon start cracking down on exotic assets related to the cryptocurrency.

Tough Regulation for Crypto Derivatives

After yet another massive price swing at the end of September, a blog post on the Economist sees regulators tackling derivatives underlying Bitcoin. According to the article, regulators across the globe are looking to halt crypto derivatives trading for retail investors.

In May this year, the House of Representatives in Japan accepted a financial service bill on crypto regulation that requires traders to have stringent registration procedures before trading crypto derivatives. Hong Kong, France, and Germany are getting in on the act barring retail crypto investors from making crypto price bets.

FCA Joins in Regulation of Crypto Derivatives

In early July BEG reported the British financial watchdog, the Financial Conduct Authority (FCA), proposed rule changes to ban retail investors from making price bets on exotic crypto assets. On October 3rd, the agency held a consultation meeting on the proposed rule change with the final decision expected to be announced in early 2020.

The long waiting period, however, is not expected to heavily impact the decision to ban crypto derivatives, the Economist report further stated.

A Regulated Future for Crypto Retail Traders

The roadblocks on the cryptocurrency industry, given its young stage in growth, is set to continue according to the report. However, FCA does not want to stifle the development of the industry but help in it in growing in a regulated environment. In early Sep, the FCA granted a license to CF Benchmarks making it the first crypto index provider in Europe.

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