Traditional Financial Exchanges Oppose UK Crypto Derivatives Ban for Retail Investors

The World Federation of Exchanges (WFE) has requested UK regulator Financial Conduct Authority (FCA) to not ban the sale of crypto derivatives to retail traders.

A proposed ban would envelop regulated exchanges and CCPs who function beneath stringent rules to offer pre- and post-trade threat administration requirements which might be designed tot foster protected and environment friendly markets, the group mentioned.

The London-based group contains main regulated buying and selling platforms for crypto futures and choices, together with CBOE, CME Group and nationwide exchanges.

WFE’s remark is available in response to a FCA’s session paper stating “retail consumers can not reliably the value and risks of crypto derivatives and exchange-traded products.”

The draft paper got here out in July and its closing model, which can end in a ban on derivatives buying and selling for retail traders, shall be introduced in 2020.

In the doc, the FCA mentioned retail shoppers should not able to commerce derivatives, reminiscent of futures and choices on crypto exchanges, as a consequence of market abuse, monetary crime, excessive volatility and a lack of knowledge within the new asset class.

WFE CEO Nandini Sukumar mentioned: “We ask that authorities, including the FCA, chart the right regulatory course to allow the market to flourish and benefit its consumers even as we understand that it’s a balancing act.”

However, Sukumar mentioned that the WFE did assist the regulator’s need to raised defend weak shoppers.

FCA’s ban attracts a stark distinction with the U.S. monetary watchdog’s response to crypto spinoff buying and selling. This week, the Commodity Futures Trading Commission (CFTC) has dominated ether, the second-largest cryptocurrency by market cap, is a commodity.

“We’ve been very clear on bitcoin: bitcoin is a commodity. We haven’t said anything about ether – until now,” Tarbert mentioned. “It is my view as chairman of the CFTC that ether is a commodity.”

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