The World Federation of Exchanges (WFE), a global trade association of publicly-regulated exchanges, has appealed to the United Kingdom’s Financial Conduct Authority (FCA) to not restrict cryptocurrency derivatives for retail investors.
The WFE made a statement on Oct. 7 in response to the British financial regulator’s consultation paper on a potential ban on crypto derivatives such as Bitcoin (BTC) futures and other crypto-related trading products, initially announced in July. The WFE proposed that the FCA develop proper consumer protection instead.
Recommendations to build proper regulations
The WFE accompanied its response with an array of recommendations such as the potential implementation of standards for the aforementioned products, consideration of underlying market structures, and a review of the ban — if it is introduced — to ensure consumer choice and access, among others.
WFE CEO Nandini Sukumar urged authorities to build relevant regulations to enable the market to further develop, stating:
WFE comprises of the world’s major stock exchanges, including Nasdaq, CME Group, Korea Exchange, the London Stock Exchange and Deutsche Boerse.
The FCA’s stance toward cryptocurrencies
Although the FCA is still considering the restriction of crypto derivatives for retail investors, it recently concluded that major cryptocurrencies are “exchange tokens,” which are “usually decentralized and primarily used as a means of exchange.” The regulator emphasized that such digital currencies do not fall under the regulatory scope of the FCA and are outside its regulatory purview.
In late September, U.K.-based regulated public exchange Coinshares claimed the FCA had not provided enough evidence to justify a proposed ban on cryptocurrency exchange-traded notes, warning its customers that they will no longer be able to trade such products if the ban is approved.