The policy decision-makers in the United Kingdom are divided on whether the sale, marketing, and distribution of derivatives and exchange-traded notes (ETNs) tied with cryptocurrencies should be prohibited when it comes to retail investors. The Regulatory Policy Committee believes the measure, adopted in 2021, is unjustified under the current circumstances.
The chief British regulator, the Financial Conduct Authority (FCA), imposed the prohibition in January 2021. Since then, companies can no longer offer cryptocurrency derivatives products such as futures, options and exchange-traded notes, or ETNs, to retail customers.
The blanket ban was imposed despite 97% of respondents to the FCA’s consultation opposing the “disproportionate” prohibition, with many arguing that retail investors are capable of assessing the risks and the value of crypto derivatives.
On Jan. 23, the Regulatory Policy Committee (RPC) — an advisory public body sponsored by the government’s Department for Business, Energy and Industrial Strategy — laid out its reasons against FCA’s prohibition….
