British investors have been warned not to take out any cryptocurrency-related services with ‘CoinBrokerz’ after the Financial Conduct Authority (FCA) on Monday said it had faked its authorization.
The FCA doesn’t consider cryptocurrencies themselves regulated assets, but derivatives on the back of them fall under its powers of oversight. Citing the concerns identified around consumer protection and market integrity, the FCA was reportedly eyeing a complete ban on the sale of crypto-CFDs to retail investors. In a consultation with relevant stakeholders, the regulator touted the possibility of excluding derivatives referencing “cryptoassets that qualify as securities.” But in all cases, CFDs on cryptos would remain subject to ESMA’s restrictions on cryptocurrency CFDs, including lowering the maximum leverage that companies can offer.
Earlier this year, however, it named a small number of crypto-linked firms as having been accepted within its sandbox, which allows testing their solutions and business models in a live market but controlled environment.
Trading Places: Finding The Best Jurisdiction for Your BrokerageGo to article >>
Also warns against an asset manager
CoinBrokerz is targeting UK investors offering a full range of offshore investment services, including CFDs on Bitcoin, Litecoin, and other crypto assets, but the City watchdog stressed the registration claims on its website is a fake and the firm is not authorized to do business in the UK.
In addition, the FCA blacklisted an asset management brand as they promote their services while having no valid licenses of any kind, stating that Pelham Capital is not authorized to promote its advertised products.
According to the City watchdog, many of these entities are acting in a capacity requiring them to be registered with the FCA. Registration allows the agency to provide greater security and oversight of the industry by examining whether firms meet minimum financial standards as well as disclosure, reporting, and recordkeeping requirements.