Britain’s financial watchdog, the Financial Conduct Authority (FCA), might ban selling derivatives based by certain types of cryptocurrency assets to retail investors. The watchdog will launch a consultation period later during the year.
Regulators all over the world are wary of risks related to the nascent industry of digital assets, and the FCA is no exception here. The Authority accesses whether virtual coins fall within the existing rules applicable to the financial assets, or some new regulation is required.
According to the recent guidance developed by the FCA, certain types of digital assets come under existing regulation. Also, companies engaged in business activity that involve crypto assets shall obtain a license from the FCA.
“Later this year the FCA will consult on banning the sale of derivatives linked to certain types of crypto assets to retail investors. The government is planning to consult on whether to expand the regulatory perimeter to include further crypto assets activities,” the FCA explained in a recent statement.
The British government will also publish a consultation paper on the proposed expansion of the watchdog’s powers to include new types of cryptocurrency assets to the instruments covered by the existing regulation.
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