On October 29, the Financial Conduct Authority of United Kingdom government announced commencement of consideration of a ban on derivative products related to cryptocurrency. This is due to the protection of consumers in these markets, as well as the fight against money laundering. Futures and options for virtual currency in the course of discussions that will begin in the first quarter of 2019, will be discussed in this vein.
FCA concerned about consumer protection and the risk of illegal cryptocurrency-related activities
Cryptoassets accepted as securities will not be subject to this prohibition, remaining under the time limits imposed by the European Security and Market Authority. However, all derivatives of stock tokens, including CFD, Bitcoin and futures, are supposed to be banned for sale to retail buyers.
European Union regulators said such bans would prevent financial instability in markets. They have stated many times that cryptocurrencies and other cryptoassets are used for fraudulent activities, the financing of terrorism and money laundering, being an insecure tool for investors. They announced the protection of public funds through prohibitions.
With such control of cryptocurrency-related instruments, FCA involves the prevention of illegal activities. The FCA reiterated the same money laundering and terrorist financing threats that they want to prevent with such measures. They stated developing of rules for the circulation of cryptoassets for the implementation of their intentions.
The Cryptoasset implementation team for the above mentioned measures was created specifically for the development of this project and the introduction of regulations into the legislation. Official statements about the goal of creating a group sound nobly and socially useful.
At the same time, the indisputable facts are ignored that large banking structures and cartels are the most obvious participants in the processes of laundering illegal money, which suggests the interest of these structures and their concern about increasing competition from cryptocurrency companies. Money laundering and terrorist threat concerns appear as a convenient and natural reason for promoting their interests in various governments.
Announced measures will be gradually introduced during 2019. At the beginning of the year, discussions and consultations will begin on the implementation of protective measures and regulations. Then, as soon as they are ready, they will take the form of legislative drafts and be approved by the government.