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UK regulator bans sale of crypto derivatives to retail users

Legal

www.theblock.co 07 October 2020 08:00, UTC
  
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The U.K.'s Financial Conduct Authority (FCA) has today officially banned the sale of cryptocurrency derivatives and exchange-traded notes to retail users, more than a year after first proposing such a ban.

The FCA said these products are "ill-suited" for retail consumers due to various reasons, including "extreme volatility" of cryptocurrencies. There is also no legitimate investment need for retail consumers to invest in these products, said the regulator. Hacks, inadequate understanding, and cryptocurrencies' "no reliable basis for valuation" are some other listed reasons for the ban.

"This ban reflects how seriously we view the potential harm to retail consumers in these products. Consumer protection is paramount here," said Sheldon Mills, interim executive director of strategy and competition at the FCA.

The FCA estimates that retail consumers will save around u00a353 million (~$68 million) from the ban on these products.

This is a developing story...


© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.


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