New UK FCA law enters into force prohibiting the sale of cryptocurrency derivatives to retail traders

Recently, a new law passed by the Financial Conduct Authority came into force in the UK.Supervision Authority (FCA), which completely prohibits the sale of cryptocurrency derivatives to private traders.

The law caused division of opinion among the mainThe country's crypto traders say the law will knock down retail investors, forcing them to switch to shadow exchanges. In contrast to the Foggy Albion’s fear of new cryptocurrency solutions, the same Germany is officially introducing blockchain to record transactions with securities.

In October 2020, the FCA introduced a new codecryptocurrency laws governing the sale of derivatives on these assets, effective January 6, 2021. According to the main provisions of the law, cryptocurrency service providers are prohibited from distributing cryptocurrency-related financial derivatives to private traders and other retail clients. This is reported by the Bitcoinexchangeguide edition.

FCA believes that these products are not suitable for retail consumers due to the significant harm to the country's economy.

The financial regulator has indicated the assessment indicatorsunderlying cryptoassets, market intervention, financial fraud and increased volatility in cryptocurrency prices as reasons for stopping the sale of derivatives to private investors.

While retail shoppers do not fully understand these assets, the report states that "shoppers have no legitimate need to invest in these products."

Meanwhile, another European country, Italy, is actively promoting investment in cryptocurrencies by introducing innovative blockchain-based banking solutions.

The FCA said in a statement that investing in crypto ETNs and CFDs could result in clients "suffering sudden and unexpected losses."

At the time of the entry into force of the ban, opinionscryptocommunities are divided. Thus, critics emphatically declare the imperfect nature of the law, while others praise the steps of the regulator. Critics of the idea argue that the rule restricts retail investors (even professional ones) from investing in cryptocurrency derivatives. They also say that retail customers should be given equal opportunity with organizations.

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