U.K.'s Financial Conduct Authority is Considering Bans on Some Crypto Derivatives

Christopher Woolard, an executive board member at the Financial Conduct Authority (FCA), recently spoke at an event in London where he mentioned that the organization has concerns that retail investors are being sold crypto products that are very risky and extremely volatile, with a lot of “underlying market integrity issues”.

The FCA will consult on a prohibition of the sale to retail consumers of derivatives referencing certain types of crypto assets (for example, exchange tokens), including contracts-for-difference, options, futures and transferable securities.

The FCA also plans, by the end of the year, to consult on which crypto assets fall within their regulatory framework and which don’t. A secondary consultation will then determine whether or not the agency needs a broader regulatory remit.

Woolard also said that the U.K. treasury will make substantial efforts to deal with the use of crypto assets in financial crimes as they plan to fully meet and even go beyond the requirements of the fifth EU Anti-Money Laundering Directive (5AMLD).

On this, [the Treasury] will first consult and then legislate on how to transpose 5AMLD and broaden the scope of anti-money laundering and counter-terrorism financing regulation further.

The executive director also said that the FCA’s Cryptoassets Taskforce is making the Treasury plan a further study if and if any regulation can “meaningfully and effectively” address the risks cryptocurrencies pose.

[The Treasury] will consult in early 2019 on whether and how exchange tokens, as well as related actors such as exchanges and wallet providers, could be regulated effectively.

Woolard concluded his speech by inviting international counterparts to collaborate with them in order to best address this issue.