FCA proposes ban on cryptocurrency products

Willing2Learn

Source: https://www.theguardian.com/technology/2019/jul/03/fca-proposes-ban-on-cryptocurrency-products

The UK’s markets regulator has proposed a ban on financial instruments linked to digital cryptocurrencies such as bitcoin, warning that such products could cause huge losses for retail consumers unlikely to understand their risks or value.

The Financial Conduct Authority (FCA) said products such as derivatives and exchange-traded notes (ETNs) that reference crypto-assets were “ill-suited” to small investors.

It cited their “extreme volatility”, the difficulty in valuing them, consumers’ patchy understanding of what they were buying and the increased risk of financial crime.

eskbanker

For anyone not wishing to have news filtered via the Guardian, the FCA's press release, including links to their more detailed analysis, is https://www.fca.org.uk/news/press-releases/fca-proposes-ban-sale-crypto-derivatives-retail-consumers

sal_III

Good. Usefulness of digital/crypto currencies aside, their "investment" potential is pure tulip mania.

boo_star

But this isn't going to ban the sale of cryptocurrency to lay people which I suspect is where the overwhelming majority of money gets lost.

VoucherMan

Thought I'd add this in case anyone's interested.

boo_star wrote: »

But this isn't going to ban the sale of cryptocurrency to lay people which I suspect is where the overwhelming majority of money gets lost.

Just found this topic, following an email I received today from one of my credit card issuers.

Important changes to your Asda Cashback Credit Card account.

We’re letting you know about important changes we’re making to your Asda Cashback Credit Card account.

Please read the following information carefully as it explains how these changes may affect you. You will see that some of the clauses in your Terms and Conditions have changed so please find a new copy here.




Gambling purchases


From 13th September 2019 you are no longer able to use your card for Gambling transactions. Please see clause 5.3 in your Terms and Conditions.

Interesting, I thought, because isn't buying crypto effectively gambling?
Sure enough

5.3 The Card and Account may only be used for private, and not business, purposes nor for any gambling related transactions or to purchase Crypto currency. The Card may only be used during the period of its validity, as stated on the Card.

If other issuers are doing the same, it may not stop people, but it will make it a whole lot harder to buy.