Watch­dog to rein in crypto trad­ing as bit­coin slides

Evening Standard - West End Final Extra - - Business - Rus­sell Lynch @russ_­lynch

THE City watch­dog flagged up plans to put much tighter reins on the trad­ing of volatile cryp­tocur­ren­cies to­day as bit­coin plunged again.

The Fi­nan­cial Con­duct Au­thor­ity will con­sult early next year on a po­ten­tial ban on the sale of prod­ucts to re­tail cus­tomers such as con­tracts for dif­fer­ence linked to cryp­tocur­ren­cies.

CFDs al­low cus­tomers to bet on volatile cur­ren­cies us­ing bor­rowed money, en­hanc­ing win­nings but also mag­ni­fy­ing po­ten­tial losses on a hugely volatile as­set class.

The FCA’s move fol­lows the fi­nal re­port of the UK Cryp­toas­set Task­force in Oc­to­ber. Bit­coin was at the cen­tre of a buy­ing frenzy a year ago that pushed the price to al­most $20,000 but it has fallen by more than 80% since then. It lost an­other $241 to $3362 to­day.

The watch­dog is also widen­ing the scope of a Euro­pean crack­down on spread­bet­ting in­tro­duced this sum­mer to in­clude so-called “turbo” cer­tifi­cates, which have sim­i­lar risk fea­tures and pay­out struc­tures to CFDs.

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