The crypto ban introduced by the U.K.’s Financial Conduct Authority (FCA) in October 2020 comes into effect on January 6, 2021. The U.K.’s financial regulatory authority had announced a ban on the sales, marketing, and distribution of crypto-based investment products to retail consumers. The U.K. ban, which comes into effect today, prohibits exchange-traded notes (ETNs) that reference certain types of crypto-assets to retail consumers. The FCA mentioned that retail investors would save around $70 million after the recent ban on illegal crypto products.
The crypto community reacted strongly against the FCA ban.
The crypto community had reacted strongly against the ban and argued that the recent initiative by the U.K. financial regulator would be destructive for the cryptocurrency market in the country as investors will shift to offshore crypto exchanges, beyond the reach of the financial regulator. Commenting on the ban, Jason Brown, Director of Business Development at Komodo, said: “When the U.K. government passed the ban in October, there was no coordination with officials in the U.S., E.U. or any other regions around the world.”
Crypto regulations continue to remain in a grey area worldwide.
Earlier, U.S. FinCEN proposed new crypto-wallet regulations that sparked a controversy in the crypto community as several criticized the U.S. regulator. In a January 4 letter addressed to FinCEN, payment firm Square CEO Dorsey said, if the rules are approved, cryptocurrency customers may be pushed to use unregulated services outside of the U.S. “This creates unnecessary friction and perverse incentives for cryptocurrency customers to avoid regulated entities for cryptocurrency transactions, driving them to use non-custodial wallets or services outside the U.S. to transfer their assets more easily,” Twitter CEO wrote. Crypto exchange Coinbase also urged FinCEN to give more time to implement such regulations.