UK Firm Approved For Offering Crypto Derivatives
The electronic OTC trading firm and digital currency liquidity provider called B2C2 has been approved for offering crypto derivatives. The scale, as per the official report, will revolve around the United Kingdom.
Approved for CFDs
The London-based company revealed recently that is subsidiary B2C2 OTC Ltd. has received the green light – and is even regulated – from the country’s financial watchdog called the Financial Conduct Authority (FCA). Through this approval, the firm will be able to arrange and deal in digital currency contracts for difference or CFDs.
Basically, crypto CFDs will give traders the ability to predict the future price change of certain digital currencies. At the same time, they provide the opportunity to generate profit both in falling and rising markets by going either short or long.
B2C2 OTC’s CFD product will reportedly offer exposure to the world’s leading crypto Bitcoin, as well as altcoins such as Ethereum, Litecoin, and XRP.
According to the founder and CEO of B2C2 named Max Boonen, through the company’s offering, eligible clients and counterparties will be able to acquire derivative exposure directly to the digital currency markets. Plus, they can easily avoid the different risks associated with cryptocurrency custody.
Words Of Wisdom From FCA
The aforementioned United Kingdom financial watchdog’s approval of a cryptocurrency derivative product is quite a notable one. This is due to the fact that it issued warnings over CFDs in the past. Sometime in November 2017, the authority stressed that digital currency CFDs are “extremely high risk” and, more importantly, a speculative investment. People, according to the authority, should be fully aware of the risks involved, thus they should carefully consider whether or not to invest in digital currency CFDs. To put it simply, the latter might not be suitable to all interested participants.
Last April, though, the authority mentioned the idea of authorizing crypto CFDs providers as long as these products could be deemed financial instruments under the umbrella of existing derivatives. It also stated during that time the companies conducting regulated activities on crypto derivatives must, in one way or another, follow all applicable rules in the FCA’s Handbook. More importantly, companies should follow the ones suggested in any relevant positions directly applicable European Union regulations.
According to the official report, the regulator seems to be tightening its oversight of the digital currency space. Just recently, it set out proposed guidance for how digital assets should be regulated in the United Kingdom, though it has taken a positive stance on the innovation of blockchain technology.