UK Prohibits Cryptocurrency Deposits As Per Reports

Major Banks in UK Shut Down Virtual Currency Deposits

  • The Financial Conduct Authority (FCA) imposed restrictions on the offer of subordinates and exchange-traded notes (ETNs)
  • The U.K. monetary controller has said that it believes the items to be inappropriate for retail shoppers because of the potential damage they present
  • The new guideline is being reprimanded by some within the crypto industry, who perceive the ban as an obstruction to the otherwise developing cryptocurrency

Cryptocurrency users in the United Kingdom are confronting expanding troubles in accessing their profits, with the nation’s significant banks closing down digital currency trades and deposits.

Ban on Crypto Derivatives Trading in UK

A restriction on the trade of crypto derivatives and exchange-traded notes (ETNs) in the United Kingdom was implemented on 6th January. Declared by the Financial Conduct Authority (FCA) in October after a long discussion, the boycott restricts the trade, advertising and dissemination of contract for differences (CFDs), futures, options and ETNs that reference digital forms of money to retail speculators.

As indicated by latest reports, banks like HSBC have presented preventive measures which will disable transfers from cryptocurrency exchange platforms to their accounts. This has been received with a lot of backlash from crypto users who are viewing it as a setback. This is inadvertently going to present critical difficulties for crypto investors and clients in the nation, presently incapable to gain access to digital assets through their HSBC accounts.

Raised Concerns About Users Turning to Unregulated Platforms

This suspension takes place as U.K.’s emerging reputation transforms into holding a strict jurisdiction for digital currency users. It also comes in the wake of warnings from the FCA about the impact of digital currency scams in the country. The move is expected to push crypto customers towards new startup banks, which invariably have an accepting approach to digital currencies and digital assets. Some investors are also relying on decentralized finance and stablecoins, or simply spending their digital currencies without converting to fiat, in order to get around the new restrictions.

This has additionally raised concerns as the prohibition of digital money derivatives will drive retail clients to unregulated stages which will offer even less security than the governed institutions. This point has been put across by Dermot O’Riordan, who is a partner of Eden Block, a European funding firm centred around blockchain innovation.

The FCA’s response to the criticism voiced by digital currency users is much awaited, as it would impact the future of cryptocurrency in the UK.

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Source: https://www.thecoinrepublic.com/2021/01/14/uk-prohibits-cryptocurrency-deposits-as-per-reports/