Why Crypto Trading is BANNED in 2021
British regulator has banned the sale of crypto derivatives to individual investors
British regulator decided to restrict access to crypto derivatives
Ban Expected to Save Up to £ 53m for Individual Investors
The regulator itself claims that the decision to ban is associated with the desire to “protect” investors
The regulator has banned the sale of certain cryptocurrency derivatives to individual investors starting January 6, 2021.
The UK Financial Conduct Authority (FCA) has banned the sale of cryptocurrency derivatives to individual investors, citing potential losses from investment in “unregulated cryptoassets”.
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The regulator claims that crypto-oriented products are not suitable for this type of investor due to the inability to assess the reliability of assets.
In particular, the British regulator believes that individual investors should not have access to derivatives due to:
- failure to assess product reliability;
- high activity of financial crimes in the secondary market;
- high price volatility;
- inadequate understanding of the essence of cryptocurrencies;
- no legitimate need for investment.
FCA cited Bitcoin, Ethereum and XRP as “unregulated assets”.
For the benefit of investors
The ban covers not only the sale of cryptocurrency derivatives (such as CFDs, options, futures, and exchange index notes), but also advertising of such products..
In addition to the investors themselves, the restrictions also apply to cryptocurrency issuers, brokers and investment platforms, financial advisors, as well as cryptocurrency exchanges..
FCA’s Acting Competition Director Sheldon Mills said:
“The ban reflects how seriously we consider the potential harm to individual investors from these products..
Investor protection comes first here “.
FCA estimates that the ban would save individual investors up to £ 53m (~ $ 68.7m).
The ban comes into force on January 6, 2021.
At the end of June 2020, the regulator published the results of a survey, according to which over 40% of respondents buy cryptocurrency as gambling. FCA estimates that approximately 1.9 million UK citizens (3.86% of the total adult population) already own cryptocurrencies.