The FCA restricts the circulation of crypto-derivatives by banning their sale to retail customers

FCA measures include banning the sale, marketing and distribution of any derivatives and exchange traded notes with linkage to unregulated cryptoassets, citing “inherent nature of the underlying assets, which means they have no reliable basis for valuation” to justify them.

According to Sheldon Mills, interim Executive Director of Strategy and Competition at the FCA, this ban “reflects how seriously we view the potential harm to retail consumers in these products. Consumer protection is paramount here.”

This “blow to the crypto world”, as Laith Khalaf of AJ Bell had it when inquired by the CITY A.M., was further explained by the FCA by extreme volatility in the cryptoassets market, the widespread financial crime in the secondary market and “inadequate understanding of cryptoassets by retail consumers”, so the regulator’s intention is to prevent retail customers’ sudden and unexpected losses.

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