The financial regulators in the United Kingdom have made their last move in the crypto news and are now reportedly looking to outlaw cryptocurrency derivatives over perceived risks to retail investors. As we can see, UK regulators may soon decide to ban cryptocurrency derivatives – in a move which comes as the market continues to gain even more prominence against the traditional crypto spot trading.
Even though there are several financial watchdogs in different jurisdictions which have proposed stringent regulatory requirements for cryptocurrency derivatives trading, an outright ban would be a first move.
The UK regulators from the Financial Conduct Authority (FCA) consultations definitely fall in line with the recent trend of government authorities looking to exert greater oversight on the virtual currency market.
Meanwhile, reports from The Economist show that the FCA may be about to place a blanket ban on cryptocurrency derivatives. The UK regulators have reportedly finished a round of consultations and will provide their decision in 2020. Per the FCA, cryptocurrency derivatives present a series of regulatory problems that the base asset of cryptocurrencies – are recognized as currencies. Therefore, trading in their derivatives does not fulfill the requirements for hedging.
Usually, derivatives serve as temporary havens against sudden slumps in fiat currencies. It is the FCA’s argument that cryptos are not stable enough for their derivatives to fulfill this exact purpose. This is why UK regulators are in the latest cryptocurrency news for attempting to ban them.
Speaking to The Economist, Jacqui Hatfield argued about the reports of the FCA looking to ban cryptocurrency derivatives, stating:
“This is a knee-jerk reaction. Crypto-derivatives are just as risky as other derivatives.”
As previously reported on our site, UK regulators have long desired to ban trading in cryptocurrency derivatives. Ever since the start of 2019, the talk about tighter regulatory scrutiny has wlloed them to prohibit the market completely.
Meanwhile, the crypto derivatives market has been booming with talk of institutional interest in the arena. Several crypto behemoths such as Binance have made significant efforts to enter the market, providing greater competition for the likes of BitMEX.
What’s clear at this point is that UK regulators wish out to stamp out the derivatives market – but also bring robust governing laws for the entire crypto market.
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New Jersey Is Regulating Cryptocurrencies At State Level
“People see and hear about [Bitcoin] in their day-to-day lives, but most are not quite sure what it is. We must take steps to protect consumers looking to invest in cryptocurrency, while also allowing the sector to continue to develop and expand in New Jersey.”The bill apparently requires crypto companies to disclose their terms and conditions for consumer accounts. As such, they will be protected by the Federal Deposit Insurance Cooperation (FDIC) as are traditional bank account holders. The US crypto regulation news also show that anyone applying would need to provide a schedule of fees and any information regarding the risks of investing in digital assets.
“With this legislation, consumers will be better-informed of the risks involved when investing in virtual currency.”This is what is new in the US crypto regulation news. What is important now is that with the introduction of a state-level licensing scheme, New Jersey would join its neighbor New York in requiring crypto firms to obtain special permission to operate - something that has been known as the BitLicense which the regulators in New York introduced in 2014.
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Russia Decides To Outlaw Crypto As Means Of Payment
"A decision was made following a meeting in the government to establish a ban on the issuance and use of cryptocurrencies as a means of payment," the letter read.In the same letter, Chernyshenko said that the FSB insisted that some of the crypto-related proposals should be included in Russia's bill on digital financial assets, which is very likely to pass through the parliament this spring. If this occurs, we can see how Russia decides to ban cryptocurrencies. But before that, the FSB wants to identify all crypto owners in the country. For failure to comply with the upcoming law, the FSB is going to impose administrative and even criminal liability. While the FSB and the Bank of Russia reached an agreement on how to regulate crypto, the two departments would not concede on their intentions to independently influence the regulatory process. So far, the bank has not responded to the FSB proposals. What's also interesting in the altcoin news is that a BBC investigation from earlier this month showed that the FSB could be behind the disappearance of $450 million worth of crypto from an exchange platform. Meanwhile, the action on the market is the same and the market cap is at $280 billion while BTC's dominance is at 62.9%.
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