Although the main intention of this ban is to protect retail investors from the complexity of these products, the assumption that retail investors in the U.K. have an inadequate understanding of crypto assets might be incorrect. Jesse Spiro, global head of policy and regulatory affairs at Chainalysis — a blockchain analysis company — told Cointelegraph: “Given the amount of available information and market intelligence that is now regularly produced on the cryptocurrency ecosystem, there are many retail investors that have a high degree of technical expertise and knowledge.” […] The FCA could resort to solutions like that instead of a blanket ban, according to Hao: “It is incorrect to assume that all retail investors are unsophisticated. Many of them have been in the crypto space for a long time and have a very good understanding of digital assets. Rather than a blanket ban on crypto derivatives for retail traders, which adds an additional layer of gatekeeping to the crypto space, we believe that education is key.” Another issue that a blanket ban brings up is that retail investors who are persistent in investing in these banned products will need to circumvent this rule and invest in markets that are not under the FCA’s protection. […] The crypto community has been contributing to these initiatives on education by establishing points and platforms for retail investors to be educated of any risks that are involved in trading within leveraged derivatives markets.
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