UK-regulated brokerage, FXOpen announced on Wednesday that it will stop offering cryptocurrency CFDs from January 5 to comply with the Financial Conduct Authority’s ban on the retail sale of crypto derivatives.
“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,” the broker stated.
“All positions in cryptocurrency CFDs will need to be closed before 5th January. Any remaining open positions that are not closed by 12:00 pm GMT on 5th January will be force-closed at the market price on this date.”
Breaking the Crypto Trading Market?
FXOpen was one of the first brokerages to offer crypto trading pairs. It offers CFDs trading services with over 40 cryptocurrency markets. Apart from crypto, the UK-headquartered broker offers trading with Forex , commodities, indices and shares.
The decision to stop offering crypto CFDs came in accordance with an FCA’s order to ban the sale of cryptocurrency derivatives and exchange-traded notes (ETNs) to all retail customers in the country. The regulator sees these instruments as “ill-suited for retail consumers due to the harm they pose.”
The broker specified that the ban is only for retail clients with FXOpen UK “and not to any other trading accounts you may hold with our other FXOpen Group companies.”
While regulators are trying to keep retail traders away from crypto derivatives, demand for such products from professional and institutional traders are skyrocketing.
“Professional clients are exempt from this change,” FXOpen said.
Many UK-based brokers extended offering Cryptocurrencies in recent years due to the demand for such products. Similar to FXOpen, other UK brokers and exchanges also have to stop offering leveraged crypto derivatives to retail clients.
