FCA wants to ban CFDs on cryptocurrencies

The British regulator of financial markets FCA is again trying to limit the limits for retail investors. This time they are to deal with the CFD market based on cryptocurrencies. Reason? According to FCA, there are too large fluctuations in prices, large transaction fees and not entirely clear criteria for the valuation of instruments.

Check it out: Brokers offering Bitcoin - List of offers

The United Kingdom may prohibit trade in contracts, including on Bitciona, but this is only the first attempt to change. We can read about them in the document "Restricting contract for difference products sold to retail clients". All as part of the care for individual investors who may lose a lot of money on contracts. First, however, social consultations will take place in this area.

"We will soon publish CP on a potential ban on the sale of derivatives and certain transferable securities to retail clients that relate to cryptographic assets." - we read in information from the regulator of the British market.

FCA: CFD on virtual currencies is a big risk

The potential ban on trading cryptocurrency derivatives and Bitcoin futures is back, because the first attempts on this topic appeared in 2017. It was then that the British market regulator informed that cryptocurrency CFDs are burdened with extremely high risk and are used primarily for speculation. What - by the way - everybody knows about, even a beginner and average smart investor dealing with virtual currencies. Even then, the commission was talking about above-average price volatility, excessive commission fees and insufficient transparency, and in some cases even lack of price transparency.

FCA: leverage on Forex 1: 30

Earlier, British financial supervision reported about introducing ESMA's product intervention permanently at the national level. The most important information is the reduction (or rather maintenance) of the leverage. Currently, the leverage is maximum 1: 30 (with some instruments even 1: 2). The restrictions also affected the marketing and distribution of CFD instruments. Permanent protection against negative balances was also introduced.

The changes are not a surprise, because their introduction on a permanent basis (previously in force on a temporary basis) was already announced in December 2018 year.