fbpx
Cryptocurrency

FCA Proposes A Complete Ban On Crypto Assets, Says Too Volatile For Small Investors

Smarter_way_USA

Financial Conduct Authority, the financial markets regulators of the United Kingdom has suggested a ban on crypto assets, as they pose a big risk for small retail customers who fail to understand them. The suggestion comes days after Facebook unveiled Libra, a stablecoin to be launched in early 2020. The unveiling of Libra triggered a renewed scrutiny of crypto assets globally, and regulators from around the world opposed it.

The FCA stated that crypto assets are too risky for small investors, due to their extreme volatility, and difficult to be evaluated by a common investor. The regulator states that investors may suffer sudden losses, as was seen during the bears of 2018. It believes that banning cryptocurrencies would save investor money amounting to £75 to £234 million per year. Executive Director of Strategy and Competition at FCA, Christopher Woolard, said,

As with our work on the wider CFD and binary options markets, we will act when we see poor products being sold to retail consumers. These are complex contracts built on top of complex assets.

According to Woolard, most consumers wouldn’t be able to accurately evaluate crypto derivatives. Prices of these assets, he said, are extremely volatile in nature, and any financial irregularities in these unregulated assets could cause severe losses to small investors. He further added,

It is therefore clear to us that these derivatives and exchange traded notes are unsuitable investments for retail consumers.

Stricter regulations have severely impacted markets all over the world. Europe, however, had been a pro-crypto ground until this point, a trend which seems to be shifting. The European Union, though, doesn’t consider cryptocurrencies as a threat. In its report published earlier this year, it stated that it would try to regulate crypto assets instead of banning them completely.

Meanwhile, Bitcoin is on an upsurge since February and has almost tripled in value in the last 3-4 months. It is currently moving both ways between $10,000 – $12,000 and is expected to stabilize in between for the time being. Many crypto experts have predicted that it will cross its all-time high of $20,000 by the end of this year.

Tags

Scott Cook

Scott Cook got into crypto world since 2010. He has worked as a news writer for three years in some of the foremost publications. He recently joined our team as a crypto news writer. He regularly contributes latest happenings of crypto industry. In addition to that, he is very good at technical analysis.
Event Information
Event Information
Back to top button