The chief executive officer of the crypto industry has requested the Financial Conduct Authority to re-evaluate its ban on crypto derivatives for retail users. In addition, the chairman of the ETC group, Bradley Duke, announced that the United Kingdom slows other European markets that have not placed restrictions on the industry.
ETC groups offer virtual digital assets and cryptocurrency-like exchange-traded notes to retail users across the largest stock market in Europe. Although in the United Kingdom, it is only accessible to professional, institutional investors.
The FCA restricted ETNs and other digital asset derivatives in 2020. It termed these assets as ill-suited for retail users because of the risks they impose. However, the ETC group advocated that the restriction makes traders and retail investors utilize uncontrollable exchanges where the customers will potentially face critical financial risks.
Reflecting on the Collapse of FTX
The chief executive officer, Bradley Duke, quoted the example of the collapse of FTX, the largest, if not one of the largest crypto exchange platforms in the world that filed for bankruptcy the previous year, abandoning its customers and letting them face a financial crisis. However, Bradley added that it was worth noting that the United States financial authorities did not govern the crypto exchange firm.
According to Bradley Duke, the strange thing in the United Kingdom is that the FCA banned assets meant for retail investors. So retail investors can utilize our products everywhere in Europe except the United Kingdom, where only professional investors are allowed. Bradley continued and said that he felt like that was unfair since this was a more secure alternative than the others eliminated from the table.
The boss reported that everybody conforms that it was a miscalculation by the FCA. Hoping that this will change and is the obligatory thing to do, given what FTX went through in the previous year. They were concerned about victims who lost their savings because they were involved with an unregulated entity that turned out to be a bad player.
ETC Group Tough Stand on Reviewing the Ban
Bradley Duke, the chief executive officer of the ETC group, acknowledges the administration’s efforts to control the crypto space and change the United Kingdom into a territory for the crypto industry. In the previous month, the government formulated ambitious strategizes to safeguard consumers and better the economy by robustly controlling virtual crypto asset actions.
Following the proposals, crypto exchange firms would be accountable for describing the comprehensive, detailed needs for application and disclosure documents. The proposals also target to tighten the guidelines around financial intermediaries and custodians, which are accountable for facilitating and safeguarding consumer assets.
Bradley added that if the United Kingdom is serious about establishing a crypto hub, making specific crypto asset actions into the fold of mainstream financial services guidelines is the right thing to do. A firm based on crypto and operating like a bank or broker should be regulated to boost investor trust in the crypto space.
As expected, any guideline or regulation should be weighed and sensible since we are not willing to destroy blockchain technology that comes with virtual digital assets. However, we are willing to witness regulatory checks and insights in the areas concerned, including the segregation of virtual crypto assets and capital adequacy guidelines.
