FCA-Imposed Crypto Derivatives Restriction May Cause More Damage, Executives Assert

Crypto industry leaders assert that the British prohibition on crypto derivatives is adversely affecting retail investors instead of safeguarding them.

Executives in the cryptocurrency sector are criticizing the UK's Financial Conduct Authority (FCA) for its ban on crypto derivatives, arguing that it is causing more harm to retail investors than providing any benefits. Joshua Barraclough, CEO of One Trading and a former executive at JPMorgan, stated in an interview with Financial News that the "awful" ban is "damaging consumers," implying that individuals should have the freedom to make their own investment decisions, even if they involve risks.

Konstantinos Adamos, Revolut's legal counsel for crypto, expressed similar sentiments. He acknowledged that the FCA's concerns about the intricacy and volatility of crypto derivatives are valid, but maintained that retail investors should still have the right to make their own decisions. Carly Nuzbach Lowery, founder of Gateway 21, contended that the ban is outmoded, as it seems "blunt" and unnecessary.

The FCA first implemented the ban in 2020 and reaffirmed it in a March 2024 update. The FCA's stringent approach to crypto has led companies such as crypto exchange Bybit to cease their operations in the United Kingdom. Only 14% of the 368 crypto registration applications received by the FCA since 2020 have been approved thus far.

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At the same time, the FCA has been unable to remove all unlawful crypto ads, as nearly half of the flagged promotions remain online. As reported earlier, between October 2023 and October 2024, the FCA issued over 1,700 alerts about illegal crypto ads, apps, and websites. However, less than 55% were removed.

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