UK Regulators at Odds on Potential Ban
Policymakers in the United Kingdom are currently divided on regulating the marketing and distribution of derivatives and exchange-traded notes (ETNs) tied to cryptocurrencies. On the 6th of October 2020, the Financial Conduct Authority (FCA), the chief British regulator, announced a blanket ban on crypto-related offerings. The decision was revealed despite 97% of respondents to the FCA’s consultation opposing the prohibition as “disproportionate.” The ban came into effect on the 6th of January 2021. The ban has been criticized by industry players who argue that retail investors can assess the risks and value of crypto derivatives. The imposition of the ban sparked a review of the decision by the RPC. On January 23, 2023, the RPC, a public advisory body sponsored by the government’s Department for Business, Energy, and Industrial Strategy, laid out its case against the FCA’s prohibition. Using cost-benefit analysis, the RPC estimated annual losses from the measure at roughly £268.5 million British pounds (approximately $333 million USD). The RPC further asserts that the FCA did not provide a clear explanation of what would happen in the absence of the prohibition, nor did they provide the methodology or calculations used to estimate the costs and benefits of the ban. Based on this evaluation, the RPC rated the prohibition in the “red level,” meaning that it is not fit for purpose. The RPC’s negative overview will not necessarily lead to a direct reversal of legislation. However, it does highlight a difference in understanding of what constitutes reasonable regulation by the FCA. The government has been fostering the development of the digital industry. Still, the ongoing debate on the prohibition of derivatives and ETNs tied to cryptocurrencies illustrates a lack of unity among regulators on the appropriate level of oversight required for the rapidly-evolving industry. The outcome of this debate will have a significant impact on the availability and accessibility of crypto derivatives and ETNs for retail investors in the UK. The discussions provide insight into the ongoing talks among regulators on the appropriate level of oversight for the crypto industry and how best to strike a balance between protecting consumers and fostering innovation. For Some Recent Crypto News in the UK: News about Binance UK:
Criticism Mounts Against the FCA’s Blanket Ban
Regulators Struggle to Find Appropriate Oversight
On the Flipside
Why You Should Care
Elon Musk Imposter Hacks UK Cabinet Minister’s Account, Promotes Crypto Scam – DailyCoin
Boris Johnson’s Brother Resigns from Binance UK Advisory Board Amidst Growing Scrutiny – DailyCoin
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Text source: DailyCoin.com
