According to Token Post, providing the FCA with power to regulate the promotion of certain types of crypto assets would be the quickest way of doing this and stamping out misleading advertising. A dearth of regulation around cryptocurrencies and revenant financial products had left investors exposed to risks without any of the protections usually afforded to retail investors, such as access to compensation.
The City Minister explained that the current regulation requires unauthorised companies to get their promotions approved by a regulated company before they can promote a financial product. Instead, he proposes that even regulated companies need to pass through the FCA’s gateway and obtain a specific consent before being approved to promote cryptocurrency products.
The FCA is already weighing a potential ban on the sale of derivatives based on cryptocurrencies, in what would be its first major intervention in the nascent market. The consultation could lead to prohibiting the sale of derivatives, including CFDs, options, and futures, based on cryptocurrency prices to retail investors.
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