The WFE, which scouts together over 70 exchanges, including the London Stock Exchange Group, Deutsche Borse, NASDAQ, and Intercontinental Exchange, has requested FCA not to illegalize cryptocurrency derivatives.
The World Federation of Exchange (WFE), which is made up of the globe’s giant stock exchanges such as Deutsche Boerse, the London Stock Exchange, Korea Exchange, CME Group, and Nasdaq, has requested the Financial Conduct Authority (FCA) of the United Kingdom not to illegalize crypto derivatives for retail users.
The WFE made the official announcement in reply to the financial regulator’s consultation document on potentially restricting crypto derivatives like Bitcoin futures as well as additional crypto-related items, originally issued in July. As a result, the WFE suggested that FCA create competent consumer protection.
Suggestion to Create Competent Regulations
The WFE stipulated various suggestions like the review of the restriction, reward of underlying market structure, and implementation of standards. Nandini Sukumar, WFE CEO asked authorities to create practical regulations to create a conducive environment for the market development, indicating:
“While crypto asset products have real potential, the market has suffered from unregulated providers distributing inappropriate products. Market infrastructures that adhere to strict regulatory requirements, embed consumer protection as part of their mandate and understand that integrity are fundamental to well-functioning markets, are best placed to deliver these products and support the developing marketplace.”
There’s a warning in incorporating similar measures to traded exchange and cleared derivatives as to underlying markets for the crypto asset, as this could result in unexpected consequences.
That choice to reduce extra danger exposure for retail users should be undertaken alongside the potential introduction of a standard for such items, especially as the cryptocurrency market is growing and maturing
A serious review of the restriction as the market grows for the sake of ensuring investors access. This review is meant to avoid global market fragmentation, especially if global standard-setter launches a brand new strategy for the regulation of cryptocurrency assets.
The FCA’s Take On Cryptos
Even though the FCA is still determining the ban of cryptocurrency derivatives for retail consumers, it recently finalized that key cryptos are “exchange tokens” that are “often decentralized and primarily utilized as a way of exchange.”
The regulator stressed that such virtual cash does not appear under the regulatory range of the FCA and isn’t within its regulatory scope.
Last month, Coinshare, a UK based regulated public exchange purported the FCA had not issued concrete evidence to prove a proposed restriction on crypto exchange trade money, warning its users that they will cease to transact such products if the restriction proves successful.