In light of recent events, the FCA is considering to place a permanent ban on all sales of crypto derivatives to retail investors. In their document entitled “Restricting contract for difference products sold to retail clients”, released on July 1st of this year, the FCA briefly mentions their future plans concerning the issue
The regulator issued an official press release on July 3rd detailing their intentions. In it, the UK watchdog claims that crypto assets are “ill-suited” for retail investors, most of whom are unaware of the hidden dangers that these instruments hide, mainly their capabilities to quickly deplete bank accounts due to most traders’ incompetence in dealing with them.
The FCA pointed out other reasons for wanting to ban crypto, one of them being the ever growing trend in market abuse, and most notably the seemingly infinite array of fraudulent crypto brokers. The latter of which has seen some distressing but interesting developments in recent years.
The financial regulator estimates that this risky but quite necessary evasive maneuver will save traders up to £234 million per annum.
The proposed ban will without a doubt influence the market as a whole, and will keep one too many brokers busy with the enforcement of the new rules.
If this comes to fruition we may be entering a whole new phase in the global Forex industry. Yet, we are still prone to ask what will happen to all the thousands of legitimate crypto traders once they get affected by these new impending changes?
As of now, we are currently waiting for the Consultation Paper to be released in order to answer all the questions we and traders world wide have.