{"id":91563,"date":"2018-10-31T05:00:31","date_gmt":"2018-10-31T12:00:31","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=91563"},"modified":"2022-02-07T13:27:08","modified_gmt":"2022-02-07T13:27:08","slug":"uk-considering-ban-on-crypto-derivatives","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/uk-considering-ban-on-crypto-derivatives\/","title":{"rendered":"UK Considering Ban on Crypto Derivatives"},"content":{"rendered":"<p class=\"p1\"><span class=\"s1\">On the heels of a report by a coalition of pro-blockchain groups and financial institutions warning UK officials not to over-regulate the industry, the Financial Conduct Authority (FCA) is weighing whether or not to ban certain crypto-related derivatives. <\/span><\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">While all eyes were on the budget yday, the FCA quietly announced that it considering a ban on leveraged crypto derivatives. <\/p>\n<p>It also said it would clarify before the end of the year whether certain other cryptos fall under its remit&#8230; <a href=\"https:\/\/t.co\/irnNeh5TsA\">https:\/\/t.co\/irnNeh5TsA<\/a><\/p>\n<p>&mdash; Hannah Murphy (@MsHannahMurphy) <a href=\"https:\/\/twitter.com\/MsHannahMurphy\/status\/1057215642573721601?ref_src=twsrc%5Etfw\">October 30, 2018<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<h2>Dual Reports, Conflicting Views<\/h2>\n<p class=\"p1\"><span class=\"s1\">The FCA was part of its own group, the Cryptoasset Taskforce, along with the UK Treasury and the Bank of England. The Taskforce released <a href=\"https:\/\/www.gov.uk\/government\/publications\/cryptoassets-taskforce\"><span class=\"s2\">its own report<\/span><\/a> Monday, with the <a href=\"https:\/\/www.fca.org.uk\/news\/news-stories\/cryptoasset-taskforce-publishes-report-uk-approach-cryptoassets?twitter\"><span class=\"s2\">FCA stating that<\/span><\/a> digital assets have \u201cno intrinsic value and therefore investors should be prepared to lose all the value they have put in.\u201d<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">In its report, the UK regulatory body also states that it believes crypto assets threaten to destabilize the UK\u2019s economy, while the other side argues driving crypto business away would hurt the country\u2019s reputation as a fintech hub. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">According to the <a href=\"https:\/\/www.ft.com\/content\/2e47cb3a-dbb4-11e8-9f04-38d397e6661c?utm_source=dlvr.it&utm_medium=twitter\"><span class=\"s2\">Financial Times<\/span><\/a>, the FCA is specifically looking at a ban on cryptocurrency-based derivatives to retail investors. This would include contracts for difference (CFDs), options, and futures. Some of London\u2019s largest trading platforms, such as <a href=\"http:\/\/www.iggroup.com\/\"><span class=\"s2\">IG Group<\/span><\/a> and <a href=\"https:\/\/www.plus500.com\/\"><span class=\"s2\">Plus500<\/span><\/a>, are already making money trading crypto-based CFDs based on popular cryptocurrencies like Bitcoin, Litecoin, Monero, and EOS. Since these financial instruments are classified as derivatives, the CFD has jurisdiction over their control. Plus500 availability subject to regulations&#8221; as cryptocurrencies are not available to retail clients in the UK.<\/span><\/p>\n<h2>Deciding What Falls Under FCA Jurisdiction<\/h2>\n<p class=\"p1\"><span class=\"s1\">There are, however, other crypto-based assets that fall into more of a grey area. Ones used only as a means of exchange, for example, or to raise capital or invest. Since those are not technically derivatives, some argue that they should not be regulated in the same manner. In an interview with the Times,\u00a0CryptoUK Chair Iqbal Gandham said:<\/span><\/p>\n<blockquote>\n<p class=\"p1\"><span class=\"s1\">\u201cIt is important that new rules are proportionate and do not put up excessive barriers, including for retail investors,\u201d said CryptoUK Chair Iqbal Gandham in an interview with the Times. <\/span><\/p>\n<\/blockquote>\n<p class=\"p1\"><span class=\"s1\">The FCA appears to have gone from a more neutral stance on distributed ledger technology to advocating more strongly for its regulation, at least insofar as its use in creating financial derivatives. They stated to the Times: <\/span><\/p>\n<blockquote>\n<p class=\"p1\"><span class=\"s1\">\u201cGiven the complexity and new challenges presented to traditional forms of financial regulation, more time is needed to consider how regulation can meaningfully address the risks posed by exchange tokens, such as bitcoin.\u201d <\/span><\/p>\n<\/blockquote>\n<p class=\"p1\"><span class=\"s1\">In Q1 of 2019, the FCA said it will hold a separate consultation on whether to ban the sale of crypto-based derivatives to retail investors, as well as make decisions on whether to regulate crypto exchanges and wallet providers. It will also clarify by the end of 2018 which crypto assets it has jurisdiction over, and which it would need to extend its powers to cover.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On the heels of a report by a coalition of pro-blockchain groups and financial institutions warning UK officials not to over-regulate the industry, the Financial Conduct Authority (FCA) is weighing whether or not to ban certain crypto-related derivatives. While all eyes were on the budget yday, the FCA quietly announced that it considering a ban [&hellip;]<\/p>\n","protected":false},"author":93,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[60840,11],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>UK Considering Ban on Crypto Derivatives<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/uk-considering-ban-on-crypto-derivatives\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UK Considering Ban on Crypto Derivatives\" \/>\n<meta property=\"og:description\" content=\"On the heels of a report by a coalition of pro-blockchain groups and financial institutions warning UK officials not to over-regulate the industry, the Financial Conduct Authority (FCA) is weighing whether or not to ban certain crypto-related derivatives. While all eyes were on the budget yday, the FCA quietly announced that it considering a ban [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/uk-considering-ban-on-crypto-derivatives\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2018-10-31T12:00:31+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-02-07T13:27:08+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/11\/cryptoslate-cover.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"John Bogna\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"UK Considering Ban on Crypto Derivatives\" \/>\n<meta name=\"twitter:creator\" 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