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Monday, 9 April 2018

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.