Crypto-based derivatives are too risky for small-scale investors and should be banned, believes Britain’s regulatory body, the Financial Conduct Authority (FCA). A potential ban may be put in place to protect small investors, reported The Guardian.
“Most consumers cannot reliably value derivatives based on unregulated crypto-assets. Prices are extremely volatile and as we have seen globally, financial crime in crypto-asset markets can lead to sudden and unexpected losses,” said Christopher Woolard, the executive director of strategy and competition at the FCA.
Derivatives based on digital assets may include options, futures, contracts for differences (CFD), as well as exchange-traded notes.