Watchdog to rein in crypto trading as bitcoin slides towards $3000 mark
The City watchdog flagged up plans to put much tighter reins on the trading of volatile cryptocurrencies today as bitcoin plunged again.
The Financial Conduct Authority will consult early next year on a potential ban on the sale of products to retail customers such as contracts for difference linked to cryptocurrencies.
CFDs allow customers to bet on volatile currencies using borrowed money, enhancing winnings but also magnifying potential losses on a hugely volatile asset class.
The FCA’s move follows the final report of the UK Cryptoasset Taskforce in October. Bitcoin was at the centre of a buying frenzy a year ago that pushed the price to almost $20,000 but it has fallen by more than 80% since then. It lost another $241 to $3362 today.
The watchdog is also widening the scope of a European crackdown on spreadbetting introduced this summer to include so-called “turbo” certificates, which have similar risk features and payout structures to CFDs.