FCA Opens Fire on Defunct FX Scam-Turned-Crypto Broker

The Financial Conduct Authority (FCA) Financial Conduct Authority (FCA) The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol Read this Term) has issued a warning to investors over an unregistered brokerage firm that appears to be offering cryptocurrency-related derivatives in the country.

The UK’s financial regulator in a statement Thursday red flagged a firm called SafeMarkets, saying the Estonia-based broker is not authorized to be targeting UK citizens.

The company, which operates through the URL www.safemarkets.biz, is apparently connected to a fraudulent FX broker brand which the FCA also warned against earlier last year.

While the now-defunct firm’s website is currently not accessible, www.safemarkets.com, information from different websites that scrutinize offshore brokers shows that the firm has been handling FX and CFDs trading services under fake registration claims in Estonia.

The two websites, together with a binary options brand called OptionStarsGlobal (still online), are allegedly operated by two Bulgarian citizens via different entities located in the Marshall Islands, Samoa, Estonia, and the UK.

FCA Eyes Possible Ban on Crypto Derivatives

The notice comes as a continuation of the FCA’s efforts to caution the public regarding trading in cryptocurrency-related derivatives, as such activities fall under the jurisdiction of the agency.

The City watchdog is already weighing a potential ban on the sale of derivatives based on Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term, in what would be its first major intervention in the nascent market. The regulator plans to launch a consultation in the next three months on whether to prohibit the sale of derivatives, including CFDs, options and futures, based on cryptocurrency prices to retail investors.

The regulator said it had “made clear that in its view cryptoassets have no intrinsic value and investors should therefore be prepared to lose all the value they have put in.” The FCA also states that cryptoassets posed “potential future threats to financial stability.”

The actions came after the FCA has already moved to make permanent stricter leverage conditions for CFDs trading and an outright ban on binary options.