Digital asset trading firm CoinShares is seeking to enlist the support of its customers to lobby against proposed regulations by the Financial Conduct Authority (FCA). The U.K.-based firm urged its customers to submit their responses to the FCA in protest to the proposed regulations which if enacted, could bring an end to the trading of crypto derivatives and exchange traded notes (ETNs).
The FCA released a consultation paper in July that sought the input of the public on the proposed ban on investment products that reference crypto assets. According to the paper, the public isn’t equipped to reliably assess the risks associated with investing in such products. CoinShares disagrees with the proposed ban, and it’s seeking the help of its customers to halt the process.
In a notice posted on its website, the company stated that the FCA hasn’t provided sufficient evidence to justify the ban. Instead, the regulator ‘cherry picks’ data sets that support its perception of crypto assets and ETNs.
More broadly, the FCA’s analysis on cryptoassets and these associated instruments demonstrates a lack of understanding of their functionality, value and the motivations for why an investor might seek out such products.
CoinShares included a preformatted email which it urges the customers to send to the FCA strongly disputing the proposed ban before the October 3 deadline. And while CoinShares would be the first casualty of such a ban, the company’s CSO Meltem Demirors believes that it’s only a matter of time before the implications become global.
He told CoinDesk, “If the FCA is successful in pushing this proposed ban through, it will mean that U.K. retail investors who currently enjoy access to the crypto-ecosystem via our ETNs will see their access cut off; with presumably little recourse. Additionally, the FCA has been clear in their consultation to note that they intend to work with other regulators to ensure the ban is not circumvented – so the potential contagion effect is very real even beyond the U.K. based on the FCA’s own words.”
The FCA has previously claimed that the ban on crypto derivatives and ETNs is meant to protect the consumers and reduce losses that accrue from the industry. According to the regulator, banning these products could reduce consumer losses by up to £234 million ($292 million).
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