The Financial Conduct Authority (FCA), which is the financial watchdog of UK, has given the firm B2C2 OTC Ltd, the go ahead to deal in cryptocurrency CFDs.
Based in London, the firm will now be able to deal in “Contracts for Difference” (CFDs). For those wondering what CFDs are, they “offer European traders and investors an opportunity to profit from price movement without owning the underlying asset.”
Back in 201, the FCA had taken a completely different stance on the issue of CFDs. AT the time it had said
“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.”
This recent acceptance of the B2C2 OTC Ltd application however, is a clear indication that the watchdog has reconsidered its position when it comes to the issues of CFDs. Albeit, unexpected, this stance definitely makes the crypto industry happy.
With this green signal, the company’s founder Max Boonen now claims that traders have more opportunities to become involved in the crypto market without the “risks associated with crypto custody.” Some of the products offered by B2C2 OTC’s CFD are Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), Litecoin (LTC) and Ripple (XRP).
FCA is now trying to provide more clarity to the industry at large in terms of what is and what is not acceptable. The FCA has adopted a more hands on approach when it comes to managing cryptocurrencies and tokens, and it seems like they plan to be more active in this field.
The FCA made a statement through which they aimed to clarify the existing guidelines. The new paper to be released explaining these guidelines
“will alert market participants to pertinent issues and should help them better understand whether they need to be authorized and what rules or regulations apply to their business.”