UK Financial Authority Considers Crypto Derivatives Ban on Bitcoin CFDs, Options and Futures
UK Financial Authority Considers Ban On Crypto Derivatives
Regulation is coming for cryptocurrencies all over the world. Now, the United Kingdom’s Financial Conduct Authority has affirmed that it will consider whether it will ban the sale of crypto derivatives or not. Unlike other similar markets, the derivatives like contracts for difference (CFDs), futures and options fall within the boundaries of the FCA. Thus, they require permission.
With all this responsibility on its back, the authority is set on launching a consultation process in the first quarter of 2019 that will help it to decide whether the ban will be placed.
The authority has affirmed this on the same day that another report from the Cryptoassets Taskforce, which includes the Financial Conduct Authority, that stated that these crypto-based derivative investments can be even riskier than traditional investments and that the losses can be very big.
Many companies are currently selling crypto derivatives in the United Kingdom and making profits and this is making the UK Financial Conduct Authority to be worried as these companies are not properly regulated.
Crypto Assets Have No Intrinsic Value, Financial Conduct Authority Affirms
The main problem, the United Kingdom’s Financial Conduct Authority believes, is that these assets simply hold no intrinsic value at all. Investors can lose all their money by investing in them and this poses a huge threat to their financial stability.
Recently, the Cryptoasset Taskforce has proposed a three-fold framework for crypto assets which would determine whether they were exchanges, investments of ways to raise capital (like Initial Coin Offerings) and create the structure to use them.
As cryptos are getting popular around the whole world, it is natural that regulation come with it as a way to protect investors from scammers and irresponsible entrepreneurs and salesmen. 2019 will see many other legislations starting to construct frameworks that will be used to regulate these digital assets.