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.
According to the regulator, companies seeking to offer derivatives linked to cryptocurrencies or tokens issued through ICOs may need to obtain authorization. Mentioned products:
- Cryptocurrency futures,
- Cryptocurrency contracts for differences (CFDs)
- 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.
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.