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UK trading firm obtains FCA licence for cryptocurrency derivatives trading

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London-based OTC trading firm B2C2 has obtained an FCA license to offer cryptocurrency derivatives trading within the UK.

An announcement on Thursday confirmed that the firm is authorised to arrange and deal in cryptocurrency contracts for difference (CFDs).

B2C2’s derivative product will allow traders to long or short a variety of cryptocurrencies including Bitcoin, Litecoin, Ethereum, and Ripple.

Max Boonen, B2C2 founder and CEO, claims that his company’s product will increase institutional exposure to the digital asset markets. He said: “Eligible counterparties and professional clients can now gain derivative exposure to the cryptocurrency markets,” which would cut out “risks associated with crypto custody.”

The FCA’s decision to authorise the firm could imply that it is starting to warm to the digital asset ecosystem. The UK regulator is currently consulting over regulatory frameworks surrounding cryptocurrency, with guidelines to be confirmed in June of this year.

During the 2017 bull run, the FCA issued a warning to traders looking to invest in cryptocurrencies. They said at the time: “Cryptocurrency CFDs are an extremely high-risk, speculative investment. You should be aware of the risks involved and fully consider whether investing in cryptocurrency CFDs is appropriate for you.”

Five months later, the regulator had more bad news for cryptocurrency companies offering CFDs, stating: “Firms conducting regulated activities in cryptocurrency derivatives must, therefore, comply with all applicable rules in the FCA’s Handbook and any relevant provisions in directly applicable European Union regulations.”

Whether or not the FCA begins to take a lighter approach to digital assets remains to be seen, but the latest move is most certainly a step in the right direction for the cryptocurrency ecosystem, which has historically been halted by regulation.

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Oliver Knight

Londoner ‘Ollie’ graduated from Birmingham City University with a journalism degree in 2016. He combines his writing with his love of crypto and blockchain here at Coin Rivet, saying “It disrupts well-established institutions (banks) while giving an avenue to the less fortunate to achieve financial freedom.” Like all true Londoners, his pet hate is… “People standing on the left-hand side of the escalators on the Tube!”.