eToro Says Not Worried about FCA’s Proposed Retail Ban

eToro Says Not Worried about FCA’s Proposed Retail Ban

eToro, one of the largest crypto-derivatives exchanges, would be slightly impacted by the Financial Conduct Authority’s (FCA) proposed retail ban, said Managing Director Iqbal Gandham.

The market regulator proposed banning retail investors from accessing crypto derivatives.

He added that he is not worried about the market regulator’s proposed retail ban.

eToro is one of the world’s leading cryptocurrency platforms, with over 10 million customers worldwide.

In a related context, Gandham said his company noticed a shift in the conduct of retail investors who purchase a digital asset and transfer it into their wallets.

The Managing Director added:

“Two years ago, people didn’t understand real [assets] and derivatives, as they just thought they were buying bitcoin. Currently, people are more comfortable in owning their own wallets and transferring crypto. In addition, they understand that if they can’t transfer it out then it can’t be real.”

Last summer, the FCA shocked investors when it announced plans to prevent selling, marketing and distributing crypto-derivatives to retail traders.

Licensed exchanges, such as Hargreaves Landsdown, have already banned retail investors from accessing crypto-derivatives. However, the market watchdog would not make a final decision in this regard until the end of this year.

For this purpose, eToro has launched Bitcoin contracts for difference in 2014. Then, it increased the number of supported cryptocurrency-based options gradually. In September 2017, the company allowed traders to purchase the underlying asset.

“Had you asked me this question in 2016/17, I would have said ‘a really, really big impact, we need to change our business,'” Gandham said.

However, most eToro’s customers purchase the underlying crypto instead of any CFD product.

Derivatives traders can hedge risks

Cryptolydian earlier reported that derivatives trading market became one of the major players in the crypto trading community, with its monthly traded volumes reaching hundreds of billion dollars.

Crypto derivatives allow traders to manage risks while benefiting from the leverage options. In addition, traders can also hedge the risks involved in the process.

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Rabea Maguid 551 Articles
Rabea Maguid is a journalist completely obsessed with crypto industry. He holds B.A. from Al-Azhar University, and has a background in journalism and economics. Rabea Maguid likes to think about the future in a positive way, and sees blockchain as a potential driver of deep societal change.