British authorities issue grave cryptocurrency warning, market falls
Be prepared to lose everything if you invest in crypto, argues the UK’s Financial Conduct Authority…
The financial watchdog in the UK, the Financial Conduct Authority (FCA), has issued a new statement making its position on cryptocurrency derivatives a whole lot clearer.
Published alongside a report from the UK’s Cryptoasset Taskforce – and you can read more about that here – the FCA has announced that it’s launching fresh consultation on whether to outlaw the sale of cryptocurrency derivatives in the UK. It’d be a sizeable intervention in the crypto market, and the news of it appears to be the main catalyst for a small drop in cryptocurrency prices across the board.
The FCA’s language in its statement is pretty unambiguous. In fact, the third sentence reads that “the FCA has made clear that in its view cryptoassets have no intrinsic value and investors should therefore be prepared to lose all the value they have put in”.
Of particular concern are the potential harm to consumers, the integrity of the market, the use of cryptocurrency for illegal activities, and future threats to financial stability.
There’s nothing overtly positive in the statement that the FCA put out, and it ends by noting that “the authorities will continue to monitor market developments and work with international counterparts to consider appropriate domestic and international responses”.
Most cryptocurrencies saw their price fall overnight, with drops in the 3-5% range. Bitcoin had already seen its value fall by some $150 throughout the day. It’s hard to see this not being related.
Expect more words from the FCA on crypto in the new year, and it’s likely best to be braced for more news along the same lines.
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