UK:
FCA Affirms Regulatory Authority Over Cryptocurrency Derivatives
12 April 2018
Cadwalader, Wickersham & Taft LLP
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The UK Financial Conduct Authority ("FCA") advised market participants that firms
engaging in business related to cryptocurrency derivatives must
comply with applicable FCA and European Union rules.
The FCA clarified that, although it does not classify
cryptocurrencies as currencies or commodities under MiFID II,
activities related to derivatives referencing cryptocurrencies or
initial coin offering ("ICO") tokens will require FCA
authorization. Products falling under the regulatory umbrella
include cryptocurrency (i) futures, (ii) contracts for difference
("CFDs"), and (iii) options.
The FCA warned that firms offering products without the
requisite authorization may face enforcement action. The FCA
directed interested parties to previous publications detailing (i)
challenges and risks of Distributed Ledger Technology, (ii) ICO
consumer risks, and (iii) risks of investing in cryptocurrency
CFDs.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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