According to the Financial Conduct Authority of the UK, cryptocurrencies and their derivatives ( Bitcoin, Ethereum, XRP,etc.) are not fit for retail customers. So the authority banned their marketing, sales, or distribution of any kind. This ban will be effective from 6th January 2021. Why? Sheldon Mills, an interim Executive Director, of Strategy and Competition, stated these reasons are the decisive factors:
- The volatile nature of the cryptocurrency market, so the risk factor is high.
- Absence of a reliable valuation technique which can be used as a basis or primary method.
- An increased crime rate in this world (abuse, misuse, and theft).
- Inadequate awareness related to unregulated crypto assets among retail consumers.
- The need or demand for legitimate cryptocurrency investment is quite low among the members of this community.
Due to these reasons, crypto assets are deemed harmful, and this is the driving force behind the ban. It would cover people and businesses that were selling these assets to these consumers, wherever they are situated.
Sheldon argued that this ban will protect the interests of retail consumers, as they could save up to 53 million pounds on average.
Sufficient to say, this news came as a huge blow to traders who are dealing with these currencies. And most of them disagree with this ban. Whether FCA uplifts the ban or enforces it further is a matter of time.
Read Full Report Here: https://www.fca.org.uk/news/press-releases/fca-bans-sale-crypto-derivatives-retail-consumers