- United Kingdom is all set to ban the cryptocurrency trading in the country
- FCA believes that retail consumer might suffer harm from sudden and unexpected losses if they invest in Bitcoin, Ether or Ripple
Come January 2021, the United Kingdom is all set to ban the cryptocurrency trading in the country. The United Kingdom Financial Conduct Authority (FCA) will make the Cryptocurrency derivatives and exchange trading unavailable to all the retail users. The decision came in the wake of frauds, financial crimes and lack of understanding among the individual investors. The agency informed that the firms who are dealing in cryptocurrency in the UK will now be unable to sell, distribute derivatives including Options and Futures contracts to retail customers.
FCA’s Stance for Ban
FCA believes that retail consumer might suffer harm from sudden and unexpected losses if they invest in Bitcoin, Ether or Ripple. Crypto assets are not specified investments, or e-money, and can be traded in popular tokens. On the other hand, specified investments are types of investments which are specified in legislation. If the firm carry out specified investments, or these type of activity are authorised by the FCA.
The FCA feels that banning on the cryptocurrency will have retail consumers save around 53 million pounds. Sheldon Mills, Interim Executive Director of Strategy and Competition at the FCA said in a statement that the ban reflects how seriously the UK views the potential harm to retail consumers in these products. Consumer protection is paramount.
On the contrary, the decision by the UK is opposite to what the US does. The crypto derivatives have gained official approval. The U.S. Commodity Futures Trading Commission had granted a license to a company dealing in crypto assets in July 2017, and other companies are following suit and launching since then.
The U.S. has given its citizens to decide on what they want to invest in and has given them the freedom to trade in any cryptocurrency whereas the U.K. sees the trading in cryptocurrency too risky.
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