The UK controller goes to restrict lending for crypto investments

The United Kingdom Financial Regulator, Financial Conduct (FCA), plans to stop the retail of investors to borrow money to finance their cryptological investments.

Toward By May 2. Financial time report, borrowing for the borrowing for the CRIPTO purchase fund is one of the upcoming crypto rules of FCA. David Geale, CEO of FCA and digital finance, said FT is that the “CRIPTO area of ​​potential growth for the UK, but must be done correctly.” He added:

“To do this that we must provide an appropriate level of protection.”

Geale denied claims that FCA is hostile to the crypto industry. Instead, he explained that he was in the industry to offer high risk investments with less consumer protection. “We’re open to work,” he said.

Interview follows FCA looking for Feedback on regulating the crypto market. Attached documentThe regulator noted that “research is whether it will be appropriate to limit companies to accept credit as a consumer agent to buy cryptoasesets.”

FCA did not respond to COINTELEGRAF publishing.

Related: FCA publishes discussion work on transparency crypto market, abuse

The upcoming rules of the FCA

FCA aims to regulate the domestic cryptocurnost, the judgment of borrowers and users, as well as neighboring financing systems (defined finance. The regulator is allegedly planned for crippto services focused on retail investors from those offer exclusively professional or sophisticated investors.

The Gale explained that the Agency aims to develop a framework “that is safe and competitive is”. He said that the regulator aims to develop a regulatory regime that would attract companies:

“If we can receive the regulatory regime, it actually becomes attractive for firms. That is what we try to achieve.”

Related: UK’s financial watch defends “too hard” crypto stance

Ban for borrowing FCA

The regulator explained that his upcoming ban was to limit loaning for consumer crypto purchases was a motivated concern, especially if the value of their cryptic funds and they relied on its value. ” The ban would also include a credit card purchase.

While 2024 FCA research shown That “leading payment method for cryptoases among Cryptoasset are still an individual’s own cash / income (72%),” also emphasizes the growing trend of credit purchases. The research states that only 6% of purchase in 2022 is on credit. Years, but this metric is in 2024. increased to 14%.

FCA also allegedly plans to block retail investors from access to cryptic lenders and borrowers. Other concerns about the crypto market that quotes the regulator include market manipulation, conflict of interest, settlement failures, lack of transparency, illiquidity and unreliable trade systems.

In order to mitigate these issues, the regulator plans to require the treatment of equal stores of cripto trading platforms. Other potential rules include the implementation of separation between proprietary trade activities than those working for retail investors and require transparency of trade prices and execution.

Trade platforms would be prohibited from paying the ordering intermediaries, and the beneficiaries of permanent services should be compensated for all potential losses caused by third parties. FCA plans to release the DEFI system without centralized operations, until they contain a “clear control person”.

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