FCA Defines Crypto-derivatives That Are Within Scope of Existing Regs

The UK's Financial Conduct Authority has explained that regulatory authorisation is required where someone is: 

• dealing in;
• arranging transactions in;
• advising on; or 
• otherwise providing services by way of business in the UK that amount to regulated activities, 

in relation to derivatives that reference either:

• cryptocurrencies or 
• tokens issued through an initial coin offering (ICO). 

This includes:

• Cryptocurrency futures: A derivative contract in which each party agrees to exchange cryptocurrency at a future date and at a price agreed by both parties;
• Cryptocurrency contracts for differences (CFDs): A cash-settled derivative contract where the parties seek to secure a profit or avoid a loss by agreeing to exchange the difference in price between the value of the cryptocurrency CFD contract at its outset and at its termination;
• Cryptocurrency options: A contract that grants the beneficiary the right to acquire or dispose of cryptocurrencies.