In a statement, a representative of the Financial Conduct Authority (FC) has told that FCA has imposed a fresh ban. Through the ban sale of any crypto byproducts which are similar to or smacks of gambling from January 2021. He said that any direct or indirect investment for the purposes of gambling is completely banned. There is an imminent risk to the investor which is unforeseeable and abrupt.
The authority told that they believe at least £53 Million will be saved each year through the imposition of the ban. Otherwise, this huge amount of money will be lost by consumers.
It is believed that the majority of crypto byproducts popular amongst investors of 22-55 age-aged are primarily akin to gambling.
FCA has informed the general public that a complete ban will become operational on the 6th of January next year. The ban will be applicable also to future trading i.e. in which investors bet on future price trending of cryptocurrencies.
The watchdog also stated that currently £75 Million has been lost in the form of charges/fees by UK’s crypto-trading firms.
Shares on UK’s famous trading platforms went down quickly shortly after the announcement of the imposition of ban by FCA. Resultantly trading platforms such as IG, Plus 500, and CMC reported a fall of shares’ prices between 2% to 3%.
FCA also said that because derivatives are used to offer presumed high rates of volatility therefore they pose grave threats. FCA also termed such activities as a financial crime which is caused by maligning the otherwise legitimate market. FCA apprised that it has received many complaints in the past and is aware that the crime is still happening. The imposition of the ban will safeguard the investments of the consumers, told FCA.
FCA was considering the imposition of a ban since last year and only announced on Wednesday to implement it in January 2021.
FCA’s announcement sparked heavy debate amongst those who are against the banning policy. They said that the derivatives which are akin to “gambling” are based on those cryptocurrencies which have no fundamental value.
A famous analyst, LaithKhalaf, commented on the FCA’s ban by saying that it has damaged the crypto industry.