UK Regulators Propose crypto Restrictions for Retail Investors
The UK is set to introduce new rules for crypto assets, aiming to protect retail investors from financial risks. The Financial Conduct Authority (FCA) has proposed a ban on buying crypto with debt, including credit cards and e-money.
These measures aim to shield consumers from the volatility of crypto assets. Retail investors will also be restricted from using certain high-risk crypto lending platforms. The FCA believes these steps are necessary to prevent meaningful financial losses.
New regulations for crypto platforms are also in the works. Crypto companies will need to establish a legal presence in the UK and comply with local regulations. This includes transparent pricing and keeping platform assets separate from user funds.
Payment for order flow, a practice where brokers direct client orders to specific market makers, will be banned. This is to avoid conflicts of interest and ensure fair trading.
David Geale, FCA’s executive director, clarified that these rules are not a crackdown on crypto. “We are open for business,” he said, emphasizing the need for appropriate investor protections. He compared crypto to other high-risk investments, noting that crypto regulations frequently enough offer less protection.
Geale believes these measures will foster growth in the UK’s crypto sector while ensuring safety for investors.
