UK Regulatory New Policy: Ban on Selling Encryption Derivations to Protect Investors from Losses of £53,000,000

The UK's Financial Conduct Authority recently announced a new policy aimed at protecting retail investors. This policy will prohibit the sale of crypto assets derivation to ordinary consumers, a decision based on multiple considerations.

Regulatory authorities pointed out that the Crypto Assets market has characteristics of "extreme volatility," making related derivation unsuitable for ordinary investors. In addition, retail consumers often find it difficult to fully assess investment risks, including risks related to the project itself and cybersecurity threats. Regulatory authorities also emphasized that the lack of a reliable valuation basis for Crypto Assets is one of the reasons that led them to make this decision.

The ban is expected to officially take effect on January 6, 2021. Regulators estimate that this move could help ordinary investors avoid potential losses of around £53 million in the Crypto Assets derivation market. It is worth noting that the impact of this policy is quite extensive, affecting not only Crypto Assets derivation trading platforms but also related industry participants such as crypto brokers, investment platforms, and investment advisors.

This measure reflects the concerns of regulatory agencies about the risks in the Crypto Assets market, while also demonstrating their determination to protect the interests of ordinary investors. However, this may also provoke discussions within the industry regarding regulatory balance and space for innovation.