Several prominent crypto businesses have warned the U.K.'s regulator that it is making a mistake.
A ban on crypto derivatives has come into force in the U.K. — meaning regulated exchanges in the country will no longer be able to offer options, futures and contracts for difference.
The move was first announced by the Financial Conduct Authority in October, with the regulator proclaiming that it would prevent consumers from losing an estimated £53 million ($72 million) a year. In a statement issued at the time, it said:
“Significant price volatility, combined with the inherent difficulties of valuing cryptoassets reliably, places retail consumers at a high risk of suffering losses from trading crypto derivatives. We have evidence of this happening on a significant scale. The ban provides an appropriate level of protection.”
But several prominent businesses in the industry have warned that the FCA is making a mistake, as its drastic move was not performed in consultation with other regulatory bodies in the U.S., EU and beyond. Others fear that the ban could force traders to pursue investments on unregulated trading platforms in other jurisdictions.
The ban won’t stop British consumers from being able to purchase the likes of Bitcoin and Ethereum directly.
Nonetheless, the governor of the Bank of England, Andrew Bailey, has repeatedly made statements warning that gaining exposure to crypto is a bad idea — adding that investors should be prepared to lose all of their money.