Cryptocurrencies shrug off FCA ban threat

by tradefredAdmin on
Tue, 10/30/2018 - 12:09
Cryptocurrencies moved higher, despite a report that the UK's financial regulator could impose a ban on derivatives such as CFDs.

Cryptocurrency prices are on the up, despite reports that the UK’s finance regulator is considering whether to clamp down on the sale of derivatives. According to the Financial Times newspaper, the Financial Conduct Authority (FCA) will launch a consultation next year to decide if the assets should be banned.

Unlike spot-market trading on cryptocurrencies, the sale of assets such as options, CFDs and futures currently falls within the FCA’s remit and requires its official authorisation. The regulator is also reportedly planning a parallel consultation on whether to extend its reach further into cryptos themselves, as well as infrastructure providers such as exchanges and wallet services.

The FCA released a statement, making 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.” It added that the assets as a whole could pose “potential future threats to stability”.

The news comes as a new report published by the Cryptoassets Taskforce – a body that includes representatives from the FCA, the UK Treasury and the Bank of England – warned that leveraged crypto-based derivatives carried more risk that spot market trading. It said they could “cause losses that go beyond the initial investment” and impose additional fees.

Some commentators offered muted praise that the UK’s regulator was taking a proactive stance on the subject of cryptocurrencies. However, the Chairman of CryptoUK, Iqbal Gandham, stressed that “it is important that new rules are proportionate and do not put up excessive barriers, including for retail investors.”

Despite the potential legal hurdles, major cryptocurrency prices were largely higher on Tuesday. Bitcoin was darting between positive and negative territory, currently up slightly by 0.045% as of 12:03 GMT. The most popular digital token was priced at $6,316.96 a rise of $3.04.

Ethereum looked more steady at $196.26, a rise of $0.57 or 0.291%. Meanwhile, Ripple and Litecoin were also higher at $0.45 and $49.19 respectively.