The Financial Conduct Authority (FCA), UK’s markets watchdog, banned the sale of crypto derivatives and exchange-traded notes (ETNs) for retail investors earlier this week, but a public consultation process saw 97% of participants oppose the ban.
In a 55-page report by the FCA, responses from companies that sell derivatives, cryptocurrency exchanges, trade bodies, individuals, and law firms were overwhelmingly against the regulator’s ban, which was first proposed in July 2019.
The public consultation process gathered a total of 527 responses, 97% of which opposed the proposed ban, questioning the regulator’s assertions on cryptocurrencies and their intrinsic value, and whether retail investors would be unable to correctly value digital assets.
Respondents further argued a ban would be unhelpful and suggested that the FCA could help protect investors using other methods, avoiding an outright ban. Per Bitcoin.com, some argued that cryptocurrencies are valuable because they are accepted as a payment method for goods and services. Some top firms like Microsoft, for example, accept BTC payments.
Reacting to the ban, which is set to come into effect on January 6, 2021, the crypto community challenged the FCA’s decision.
The FCA, it’s worth noting, estimated retail investors will save around £53 million ($68.5 million) from the crypto derivatives and ETNs. Sheldon Mills, interim Executive Director of Strategy & Competition at the FCA, said the ban reflects “how seriously we view the potential harm to retail consumers in these products.”
The regulator further warned consumers that “any firm offering these services [crypto derivatives and ETNs] to retail consumers is likely to be a scam” after the ban comes into effect.
Featured image via Pixabay.