The Financial Conduct Authority (FCA) today issued yet another warning against an unregistered brokerage firm called ‘Next Coin Market’ that appears to be offering cryptocurrency-related products in the country.
Next Coin Market 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.
Earlier in January, the FCA has taken its first steps towards regulating cryptocurrencies as the watchdog began to answer the call for greater oversight of the growing but volatile market.
Specifically, the City regulator launched a comprehensive consultation on how it should authorize all crypto asset activities from the exchanges on which they trade, to payment companies, wallet providers and the brokers seeking to offer related derivatives.
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Prohibiting the sale of crypto derivatives
Earlier today, the regulator published the findings of independent complementary research which showed that UK consumers buying virtual coins are often looking for ways to ‘get rich quick.’ Many of those interviewed perceived crypto assets as a shortcut to easy money and wealth.
The City watchdog is already weighing a potential ban on the sale of derivatives based on cryptocurrencies, in what would be its first major intervention in the nascent market. The aforementioned consultation could lead to prohibiting the sale of derivatives, including CFDs, options and futures, based on cryptocurrency prices to retail investors.
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.
The FCA doesn’t consider cryptocurrencies themselves regulated assets, but derivatives on the back of them fall under its powers of oversight.