While it is not unusual to see a company or an industry association exhort its members to help lobby on legislation, CoinShares has taken it one step further by enlisting its customers to take action against FCA’s plans to ban cryptoassets.
The cryptoasset investment and research platform today said it ‘clearly disagree” with the City watchdog’s proposals to ban the sale of crypto-based derivatives to retail consumers due to what it considers the prevalence of market abuses.
Using a ready template on its website, CoinShares urged its clients to swap out their personal details and submit a version of this response to the regulator via email.
Coinshares already operates publicly traded crypto exchange-traded-notes (ETNs), which are regulated by the Swedish FSA and the company says they offer retail investors more “familiar channels” to invest in the growing digital asset economy.
The firm says it plans to expand in other jurisdictions but still has a lot of work to do regarding dealing with regulators investigating digital assets.
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The FCA, however, considers these products are “ill-suited to retail consumers” who cannot assess the risks of derivatives or ETNs that reference certain crypto-assets.
FCA says no reliable basis for valuing crypto derivatives
Coinshare’s derivatives have had a very successful year much like the rest of the cryptocurrency economy. Its product Bitcoin Tracker One (COINXBT:SS) yielded nearly 190 percent in year-to-date return.
“FCA’s analysis on cryptoassets and these associated instruments demonstrates a lack of understanding of their functionality, value and the motivations for why an investor might seek out such products,” CoinShares further states.
The FCA is already considering a ban on retail derivatives of cryptocurrencies, including CFDs, futures and options, as part of the UK authorities’ sweeping push to regulate the virtual asset class.
As the FCA explains, the proposed prohibition was suggested by the recently-established UK government’s crypto assets taskforce. In consultation with relevant stakeholders, the regulators touted the possibility of excluding derivatives referencing “cryptoassets that qualify as securities.”