London Regulators Propose Crypto Product Ban
Regulators in the UK have called for a ban on financial instruments involving cryptocurrencies, warning that retail customers don't understanding the risks of investments.
Regulators in the UK have called for a ban on financial instruments that involve cryptocurrencies. The Financial Conduct Authority warn that retail customers don't have enough understanding of the risks and the products are hard for them to value.
Christopher Woodland, Director of Strategy and Competition at the FCA said, "Most consumers cannot reliably value derivatives based on unregluated crypto assets. Prices are extremely volatile and, as we have seen globally, financial crime in cryptoasset markets can lead to sudden and unexpected losses."
Bitcoin has indeed witnessed volatility in recent weeks. According to Coindesk, 11th June saw BTC valued at US$7,954, climbing to US£12,444 on 26th June, and down to US$10.454 on 2nd July.
The UK's regulatory body, taking this level of fluctuation into account, has called products that involve cryptocurrencies "ill-suited" to small investors. By proposing the ban, contracts for difference (CFDs), derivatives, and exchange-traded notes (ETNs) will need to be restructed to remian compliant.
Concerns voiced by the FCA mirror the issues raised by the Indian government in their push to ban cryptocurrency trading across the board. The Reserve Bank of India are concerned about peoples' lack of understanding of what they are investing in.