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Adam Ettinger, Bakkt, Brocctagon Fintech, Coinshares, Cryptocurrency Derivatives Ban, Don Guo, Edward Drake, eToro, Fisher Bro (Fisher Broyles), Microsoft, Starbucks, UK Financial Conduct Authority (FCA)
The FCA’s ban on the sale of cryptocurrency derivatives to retail investors caught people off guard. This is not a mystery. During the consultation process that ended on October 3, 2019, 97% of the participants opposed the ban, and the UK financial regulator continued to issue the ban, completely ignoring the overwhelming public opinion.
In defense, the FCA claimed to be protecting consumers and “enhancing the integrity of the UK financial system.” However, there may be good reasons for not being impressed with many people in the UK cryptocurrency industry and elsewhere. On Tuesday, the FCA announced a ban on the sale of cryptocurrency derivatives to retail customers from January 6, 2021.
When regulators began to solicit opinions on the matter later that year, the ban on derivatives based on virtual currencies (such as Bitcoin (BTC)) that was first proposed in July 2019 resulted in 527 responses. According to FCA’s 55-page report, feedback comes from companies that sell derivatives, cryptocurrency exchanges, law firms, trading organizations, individuals, and others.
The report said that 97% of respondents opposed the proposal. They questioned the regulator’s assertion that crypto assets lack intrinsic value and the FCA’s belief that retail investors are naive and unable to properly evaluate digital assets. Respondents believed that the ban would be useless and “disproportionate”. On the contrary, it showed that the FCA achieved its goals through other means.
Proponents of derivatives put forward many references to support their position. For example, they believe that digital assets are inherently valuable because digital assets have been accepted as payment methods for goods and services, including top companies Starbucks and Microsoft, which both accept Bitcoin through the services provided by Bakkt.
However, FCA knows nothing about this. It thunders:
We concluded that encrypted assets are opaque, complex and unreliable, and cannot be used as a reference asset for retail consumer investment.
Now, the British cryptocurrency community’s reaction to the FCA ban is quite brutal. Below, news.Bitcoin.com posted some comments that came from an action that has now been considered intense and largely unexpected.
A Coinshares executive commented: “We believe that the FCA ban is further evidence that the UK is abandoning innovation in digital assets and regulatory coordination with other jurisdictions. It is still the only Western based digital asset that has no intrinsic value. Jurisdictions that ban digital assets based on false beliefs.”
Don Don, CEO of Broctagon Fintech, retorted: “We believe that FCA’s so-called “consumer protection” measures should focus on eliminating existing fraudulent companies and prioritizing consumer education, rather than weakening investment opportunities and exiting financial An increasingly important area in the market.”
Adam Ettinger, a partner at the fintech company Fisher Broyles, said: “This (ban) will push the trading of cryptocurrency derivatives from the UK to exchanges that are not regulated by the FCA, US CFTC or similar regulators in US jurisdictions. Known for its regulated capital market.”
Other comments are not so difficult. “What this highlights is that people need to be aware of the risks associated with investment, do their homework on what they invest, and have the confidence to invest on a safe and regulated platform. These rules apply to all assets from cryptocurrencies to stocks. Category.” Edward Drake, Etoro’s head of compliance and operations pointed out.
What do you think of the FCA’s ignoring the public’s view of the ban on cryptocurrency derivatives? Let us know in the comments section below.
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