In October, the United Kingdom financial market regulator FCA prohibited the sale of such derivatives to retail customers, suggesting that the average investor cannot understand them. FXOpen’s moves puts it in compliance with those rules.
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Nikhil Rathi, the new head of the U.K.'s FCA has gone forward with a ban on cryptocurrency derivatives for small investors (Photo: FCA)U.K. regulator shuts small investors out of crypto derivatives
The Financial Conduct Authority prohibited the sale of cryptocurrency derivatives to retail customers, starting today, to protect consumers
The regulator explained that the reason it believes that to be true is that the cryptocurrencies underlying such derivatives “have no reliable basis for valuation.” Beyond that, the presence of financial crime and market abuse in the crypto secondary market also makes reliable information hard to get. The FCA also cited the extreme volatility in cryptoasset valuation and the inadequate understanding of crypto by retail investors.