Insight into the UK’s Cryptocurrency Derivatives Ban

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It was learned that the decision to restrict cryptocurrency derivatives in the UK markets was taken, although most experts have advised otherwise.

The cryptocurrency derivatives restriction introduced by the FCA, which regulates the UK markets, has caused great discussions across the industry. Some experts supported this ban, while others thought it was unfounded.

Institutions that the Financial Conduct Authority consulted before taking this ban also disagreed on this issue. But the distinction there was much sharper. Because 97 percent of the financial institutions that FCA consulted with were opposed to such a decision.

“Should we ban derivatives?” he asked

The Financial Conduct Authority has been considering banning the sale of cryptocurrency derivatives to individual investors since 2019. FCA took advantage of this intervening period of several months and started to gather the opinions of financial institutions and experts on the issue. “Should restrictions be imposed on cryptocurrency derivatives” to 527 institutions and people, including cryptocurrency companies, stock exchanges, law firms, and financial experts. asked his question.

The report published by the FCA showed us that 97 percent of those who answered this question said “no, there should not be such a restriction.” The reasons of those who opposed the decision to ban the sale of cryptocurrency derivatives to individual investors were:

  • Cryptocurrencies and crypto assets in general have a fundamental (intrinsic) value,
  • Individual investors can measure and assess the value of cryptocurrencies,
  • A more measured measure can be taken without going directly to the ban.

Despite all this he banned

As is known, the Financial Conduct Authority has decided to ban the sale of cryptocurrency derivatives to individual investors despite all these returns. The FCA has produced an argument against anyone who says that such a ban decision should not be taken. Regulatory agency as a result

  • Cryptocurrencies have no intrinsic value
  • Cryptocurrency prices are too volatile
  • Individual investors do not have enough information about cryptocurrencies,
  • Cryptocurrencies can be used in financial crimes
  • He argued that the cryptocurrency market can be manipulative.

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