Regulated UK-based brokerage firm, FXOpen, has announced on stopping crypto CFDs from January 5. The latest move comes following the country’s regulatory agency, the Financial Conduct Authority’s ban on the retail sale of crypto derivatives. The announcement also notified that all positions in crypto CFDs need to be closed before 5th January. Any remaining open positions that are not closed on the specific date will be force-closed at the market price on the date.
FXOpen to Halt Crypto CFDs Offerings
FXOpen’s decision to stop offering crypto CFDs comes following the FCA’s regulation on banning the retail sale of cryptocurrency derivatives and exchange-traded notes (ETNs) in the United Kingdom. The regulatory agency (FCA) views that crypto derivatives are ill-suited and harmful for retail consumers.
FXOpen, however, did specify that the ban is only for FXOpen UK’s retail clients and does not apply to any other trading accounts with other FXOpen Group companies.
Similar to FXOpen, other UK-based brokerages and exchanges too will now have to stop offering leveraged crypto derivatives for retail customers.
FXOpen noted in its announcement statement:
“Following the decision by the Financial Conduct Authority (FCA) to prohibit retail clients from trading cryptocurrency CFDs, we regret to inform you as of 5th January 2021, you will be unable to open any new cryptocurrency CFD orders or positions.”
FXOpen has been offering CFDs trading services for over 40 crypto markets. Besides the usual crypto offerings, the firm also provides traditional financial services including forex trading, commodities, indices, and shares.
The United Kingdom to Ban Selling of Crypto Derivatives
The UK is set to ban the sale of cryptocurrency derivatives and exchange-traded notes to retail users starting in January. The decision by the UK government is completely opposite of the U.S. where crypto derivatives, particularly bitcoin, have gained official approval.
FXOpen initiated its operation in 2005 after gaining a license from the UK regulator. Since then it has expanded its business and offerings into various wings. The platform was one of the first brokerages to offer trading for cryptocurrencies.