Big news came around this week, as the FCA officially banned the sale of cryptocurrency derivatives to retails investors in the Untied Kingdom. Furthermore, the UK financial overseer also banned the sale on exchange-traded notes (ETNS). This unexpected turn of events was announced this Tuesday.
The regulator argues that digital coin instruments are not to be fully trusted as they come with an in-built unreliable aspect, are easily manipulated (especially by fraudsters and schmeers), and are incredibly unpredictable.
In an official FCA comment, this was said,
“The FCA considers these products to be ill-suited for retail consumers due to the harm they pose”
Furthermore, the FCA holds that UK retail investors lack the skill and knowledge to fully grasp the benefits but also the dangers of crypto trading. As revealed by a official statement by Sheldon Mills, the interim executive director of strategy at the FCA,
“This ban reflects how seriously we view the potential harm to retail consumers in these products. Consumer protection is paramount here,”
To clear things up, the FCA issued decree bans the sale, distribution, and marketing of all crypto derivatives, which includes CFDs, options, and futures. This impacts companies within the UK.
It is approximated that investors will save around £53, each, due to the ban.