FCA Bans Crypto-Related Investments in the UK
Financial Conduct Authority- FCA had proposed a ban on crypto-related investments in October 2020. The efforts have now come into effect in January 2021. According to the UK’s financial regulatory authority, there will no longer be any crypto-related investments to retail consumers. They have banned sales, marketing, and distributions of any crypto-based investments.
FCA has banned the Exchange-Traded Notes (ETNs) that offer crypto-assets to retail consumers. According to FCA, this will assist the retail investors to save up to $70 million as this bans the illegal crypto products.
However, the crypto businesses are not in the favour of this ban. They claim that the recent measures by FCA will prove to be destructive for the cryptocurrency market. This ban can result in investors moving to the overseas crypto exchanges where the financial regulators will be unable to reach them.
UK’s Crypto Derivatives Ban Starts Today https://t.co/WSl4s08Mxz #bitcoin pic.twitter.com/wq0nuQNNfx
— The Bitcoin Street Journal (@BTCstJournal) January 6, 2021
According to crypto firms, there was no coordination with the EU, US, or any other regulator in the world when the ban was proposed in October. The blockchain industry needs consistent regulations across all the countries and the retail investors should have the same opportunities as the firms. The investors must be allowed to make their own financial decisions. According to them, this new initiative by the FCA is a blow to the blockchain.
After the ban, many brokers stopped offering crypto CFS to investors. The global regulatory bodies are working to draft an explicit regulatory system for cryptocurrency. Even in the USA, FinCEN has announced strict KYC regulations for cryptocurrency.
