The UK’s financial watchdog has said it will ban the sale to retail investors of products that monitor the purchase price of crypto-assets like Bitcoin, stating most men and women lose money on them.
The Financial Conduct Authority (FCA) stated there is no reliable basis for valuing crypto-assets that underpin derivatives and exchange-traded notes.
Shares in online trading platforms Plus500, IG and CMC fell by between 2 percent and 3% following the FCA released its statement about the ban.
The watchdog set out proposals for the ban in a public consultation this past year, also said on Tuesday it’ll save retail investors 53 million pounds (approximately $69 million).
There is a prevalence of market abuse and financial crime, together with extreme volatility in prices, and lack of legitimate need to invest in such goods, the FCA stated.
“Significant price volatility, combined with the inherent difficulties of valuing crypto-assets reliably, places retail consumers at a high risk of suffering losses from trading crypto-derivatives,” stated Sheldon Mills, interim executive director for strategy and competition at the FCA.
“We have evidence of this happening on a significant scale.”
The FCA said the products were popular with young male investors particularly, and that most respondents to its consultation opposed a ban, asserting that crypto assets have inherent worth, with Bitcoin approved by companies like Starbucks and Microsoft as a kind of payment.
“We remain of the view that the price of crypto-assets is determined by sentiment and speculative behaviour,” that the FCA stated.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Jonathan Landay. Editing by Steve Orlofsky.
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