UK’s Crypto Derivatives Ban Starts Today

The crypto ban introduced by the Financial Conduct Authority (FCA) in October 2020 comes into effect on 6 January 2021. The UK’s financial regulatory authority prohibited sales, marketing and distribution of crypto-based investment products to retail consumers.

The UK ban, which comes into effect today, prohibits exchange-traded notes (ETNs) that reference certain types of crypto-assets to retail consumers. The FCA mentioned that retail investors will save around $70 million after the recent ban on illegal crypto products.

The crypto community reacted strongly against the ban and argued that the recent initiative by the FCA will be destructive for the cryptocurrency market in the country as investors will shift to offshore crypto exchanges, beyond the reach of the financial regulator.

Commenting on the ban, Jason Brown, Director of Business Development at Komodo, said: “When the ban was passed by the UK government in October, there was no coordination with officials in the US, EU or any other regions around the world. What the Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term industry needs the most is consistent regulations across jurisdictions. Retail investors generally should be able to have access to the same opportunities as institutions. Crypto investors should have the educational resources to know that this market is volatile and has risks, but they should also be empowered to make their own financial decisions. The UK FCA ban is a blow to blockchain adoption.”

Brokers Stopped Crypto Offerings

Following the ban announcement, serval brokers stopped offering crypto CFDs to retail investors in the UK. Finance Magnates earlier reported about FXOpen’s announcement to stop offering cryptocurrency CFDs to comply with the FCA requirements. Regulatory authorities worldwide have accelerated efforts to draft and clear regulatory framework for 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. The US recently announced a proposed crypto KYC regulation which states that digital exchanges must verify the identity of users executing crypto transactions worth $3,000 or more.

“There’s still a lot that can be done before the regulation is final. At the EU level, the legislative process involves the Parliament, the Commission (executive body), and the Council that represents member states. Education and political messages should be sent to all of them," Simon Polrot, President of ADAN said.