Singapore-based cryptocurrency derivatives trading platform Bybit has announced that it will suspend operations in the United Kingdom following a ban on retail derivatives trading by the Financial Conduct Authority (FCA).
Bybit has shuttered its operations in the United Kingdom. According to its latest announcement, it will cease rendering futures trading services to customers in the country from March 31. It has asked customers to close positions and withdraw balances before this date.
This action from Bybit complies with a ban on futures trading issued by the Financial Conduct Authority (FCA). According to the FCA, the ban was to take effect from Jan. 6, 2021.
It has also moved to restrict new signups from UK phone numbers and IP addresses.
While ensuring full compliance, Bybit said it will make efforts to engage in a dialogue with regulatory bodies and explore options.
A cryptocurrency derivatives ban has been in the picture since 2019. The FCA started considering this after it was reported that UK investors lost a total of $492 million on cryptocurrency derivatives between mid-2017 and 2018.
It further claims that a derivate ban will save its citizens about $289 million in potential losses.
FCA Finally Issues Ban
The UK independent financial regulatory body issued the ban on cryptocurrency derivatives, stating that they are “ill-suited for retail consumers due to the harm they pose.”
The UK financial watchdog outlined several other reasons for the ban, saying that cryptocurrency derivatives have no basis for valuation.
Another concern raised by the FCA is that most retail traders lack proper education on cryptocurrency derivatives. Speaking further on the ban, the regulatory body’s interim Executive Director of Strategy, Sheldon Mills said;
“This ban reflects how seriously we view the potential harm to retail consumers in these products. Consumer protection is paramount here.”
It also warned citizens to look out for and report scam cryptocurrency derivative platforms.