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UK regulator proposes ban on crypto-based derivatives

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europa7   Sunday, 10/20/19 02:59:00 PM
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UK regulator proposes ban on crypto-based derivatives
https://www.ft.com/content/bfc2759e-9d77-11e9-b8ce-8b459ed04726
"Instruments linked to bitcoin and other digital currencies are ‘impossible to reliably value’, says FCA"

retail investors repeatedly cheated by greedy, derivative-manipulating speculators (aka gamblers)?...looks like regulators are on to the scam...want to put an end to it...cheaters always wreck it for everybody...eh?

"...UK market regulators are planning to ban derivatives on cryptocurrencies for retail investors, warning it is “impossible” to value them reliably, and that trading them is “akin to gambling”.

A paper by the Financial Conduct Authority on Wednesday set out plans to prohibit the sale or marketing of derivatives linked to cryptoassets such as bitcoin and ethereum from early next year.

An 18-month study of the market by the watchdog concluded that cryptocurrencies could not be valued as easily as other volatile assets such as gold or orange juice.

In one example, the FCA found that two analysts using the same pricing model arrived, separately, at bitcoin valuations of $20 and $8,000. “This makes it impossible to reliably value the derivatives contracts...linked to them,” the paper said.

The watchdog said price movements in different crypto tokens — which often move in tandem — suggested the market was “driven by speculation”, rather then technological or economic developments, and was “akin to gambling”.

As a result, derivatives that allow punters to place bets on the future direction of cryptocurrencies “are complex contracts built on top of complex assets”, said Christopher Woolard, the FCA’s executive director of strategy and competition. “Most consumers cannot reliably value derivatives based on unregulated cryptoassets,” he added..."


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