UK's FCA Issued Warning on Crypto Derivatives

Watchdog said that companies that offer services around crypto derivatives "likely" need to be authorized by the agency
06 April 2018   496

The U.K.'s watchdog warned that crypto derivatives-related compnies "likely" need to be authorized by the agency.

Financial Conduct Authority (FCA), said that it doesn't consider cryptocurrencies to be currencies or commodities for regulatory purposes, cryptocurrency derivatives may be financial instruments under current directives.

Firms conducting regulated activities in cryptocurrency derivatives must, therefore, comply with all applicable rules in the FCA's Handbook and any relevant provisions in directly applicable European Union regulations.
 

FSA's Statement

According to the regulator, companies seeking to offer derivatives linked to cryptocurrencies or tokens issued through ICOs may need to obtain authorization. Mentioned products: 

  1. Cryptocurrency futures,
  2. Cryptocurrency contracts for differences (CFDs)
  3. Cryptocurrency options.

The agency added, that an ICO "may or may not fall within the FCA's regulatory purview depending on the nature of the tokens issued."

If your firm is not authorized by the FCA and is offering products or services requiring authorization it is a criminal offence. Authorized firms offering these products without the appropriate permission may be subject to enforcement action.
 

FSA's Statement

In general, FCA has been positive on blockchain technology, saying in 2016 that it does not plan to regulate the blockchain industry for now as it believes it needs "space" to grow, but it had more harsh position regarding ICOs are cryptocurrency.

SEC to Need More Info on BTC ETF

SEC is gathering more input from the public – to date, according to the agency, more than 1,400 comments have been submitted
21 September 2018   134

The US Securities and Exchange Commission (SEC) announced the beginning of a formal process for considering the application for the creation of bitcoin-ETF from the New York companies VanEck and SolidX. Nevertheless, the agency appealed to the community for more information. This is stated in the document published on the SEC website.

Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change.
 

The US Securities and Exchange Commission

At the moment, the SEC received about 1,400 comments.

According to the document, the Chicago Board Options Exchange (CBOE) has signed an agreement on the exchange of data on bitcoin transactions, trading and the state of the market with the cryptocurrency trading platform with Gemini.

The agency asked commentators to clarify the position of Gemini in the digital currency market and assess the likelihood of increased volatility at this site in connection with possible trades of bitcoin-ETF.

So, before September 30, the department had to decide on whether to approve, deny or initiate the proceedings. The SEC chose the latter, which is likely to delay the process until the next year.