eToro UK Not Concerned about FCA Derivatives Ban

eToro UK Not Concerned about FCA Derivatives Ban

eToro’s U.K. managing director has stated that the planned proposal by the Financial Conduct Authority (FCA) to ban crypto derivatives won’t have a significant impact on the company.

The comments made by Iqbal Gandham are in response to news from the UK’s leading financial watchdog’s plans to ban the “sale, marketing and distribution to all retail consumers” of crypto derivatives and would also include spread to contracts for difference (CFDs). Of course, this would seem like that a major issue for eToro, seeing as the firm is one of the largest crypto derivatives platforms, but apparently, this is not the case. Mr Gandham stated while speaking to the leading crypto media outlet that, Coindesk, that the impact would be “minimal”.

Gandham would not be naïve to the reality of the situation, having been in his current role since 2016. As such, he has seen the comings and going of exchange platforms, not to mention that was in the role during both the bitcoin boom and crypto winter, and platform is still going strong. However, they may be able to weather the storm better than most of their competitors due to the fact that they are one of the world’s leading exchange platform with 10 million users worldwide. His reasoning for this is much more specific though and is related to the change in users’ behaviour.

Change in Trader Mindset

He believes that people are now more likely to buy an actual cryptocurrency asset and transfer it out into their personal wallets, as opposed to previously when they have misinterpreted the product they were actually buying. This is owed to a change in trader mindset.

“Two years ago people didn’t understand real and derivatives, they just thought they were buying bitcoin. Now people are more comfortable in owning their own wallets and transferring crypto, they understand that if they can’t transfer it out then it can’t be real” he explained, “Had you asked me this question in 2016/17, I would have said ‘a really, really big impact, we need to change our business”

The change would be pertinent for eToro particularly during that era as they previously only offered derivatives opposed to the underlying asset which has been available on the platform for the last 3 years and so they are no longer relying purely on the derivatives of CFD alone. Specifically, as per Coindesk, “87 per cent of eToro’s retail users buy the asset” which rose to 90% at the end of January. For them, therefore, the prohibition of these types of assets would be a drop in the ocean compared to the rest of their companies’ trading numbers.

Not Everyone will be Unscathed

While the final decision on whether this legislation will be passed has not been reached, with this expected to happen sometime later on this year, eToro are fairly nonchalant about the decision either way. This will soothe any concerns of those invested in the opportunity. However, they are in the minority in regards to this and there could still be repercussions for many other firms who are more derivative and CFD-centric.

Notably, Coindesk highlight CoinShares as a firm who could suffer from the roll-out of these new restrictions with their executive chairman, Daniel Masters, expressing discontent with the rules and said their company have “vigorously resisted” the move from the FCA. He also stated that the rules showed a “lack of understanding” of these tradable assets. Also telling Coindesk that “Banning such instruments has many adverse consequences, “and that the “will not protect investors,

Gandham concurred with Mr Masters on the lack of protection for investors as a result of the ban and that he didn’t “understand” the reasoning behind it, stating it would better be imposed on institutional or professional traders. However, as far as he is concerned eToro will be comfortable, regardless of the FCA’s final decision.

Recently Similar News

casinoin-promotion etoro-promotion

Latest Guides

Latest News

Coinbase,Crypto Wallets,Investment

Coinbase Wallet Now Allows You to Earn De-Fi Interest

The wallet product from the exchange platform, Coinbase has expanded its use-cases and will now allow you to earn simply by storing your assets on it. The way this will work is by allowing you to lend out your crypto through the wallet. However, they are not reinventing the wheel in respect to this service […]

27 March, 2020
Binance,Social Media

Binance Plans to Raise $5 Million For Corona Relief Campaign

Binance Charity has put plans together to generate $5 million in donations which they will use to commit to providing medical supplies and help combat the effects of COVID-19. It is impossible to get away from the news of the Coronavirus which has led to isolation and quarantines in many countries worldwide, among other measures […]

26 March, 2020
eToro,Finance,Investment,Trading

eToro Compares Corona With Previous Crisis

The Corona has caused one of the fastest sell-offs ever seen on the global market. How does this compare to other previous crisis? Well, eToro have answered that question in a new report released earlier today.   The market behaviour since the start of the virus has caused serious concern and a mass reaction from […]

25 March, 2020
CFD Trading Platform,Investment,IQ Option,Trading

Trade with Multiplier at IQ Option

In their latest guide, IQ Option have drawn attention to the risky yet rewarding multiplier option that they have in place on their trading platform. In a nutshell, the multiplier allows traders to “manage a position that is greater than the amount of funds at his disposal” according to IQ Option. Already by the name […]

24 March, 2020
Assets,Investment,KuCoin,Trading

ZEL Set To Go Live For Trading at Kucoin Tomorrow

Amid the market turmoil, KuCoin has continued to improve their trading options with ZEL set to go live for trading tomorrow. Deposits for this latest token in a long list of other recently added tokens has already gone live.  However, traders will have to wait until tomorrow to get fully involved in ZEL trading. This […]

23 March, 2020
Crypto Wallets,Promotion,Trezor

Stay Safe and Save 15% on Trezor Wallets

Here at Cryptimi, we are aware that there is not much to rejoice about right now. Well, to remedy that, we have a special promotion that will see you save 15% on Trezor wallets.   The coronavirus is on-going and it is causing chaos across the globe, with a particularly negative effect on investments, both […]

23 March, 2020
CoolWallet,Crypto Wallets,Exchange Platforms,Stablecoin

CoolWallet Confirm Kinesis Partnership

CoolWallet have announced another new partnership for 2020 as they team up with the online exchange platform for physical bullion, Kinesis. The partnership will see CoolWallet delve into the precious metals trading market as this is the core focus of Kinesis who offer two native tokens that are backed by gold and silver. The way […]

22 March, 2020
AvaTrade,EU,Europe,Regulation

Short Selling Restrictions Imposed on French and Italian Stocks

As the troubling coronavirus situation continues to get worse, temporary restrictions have been imposed on French and Italian stocks. These restrictions have been instilled by European Securities and Markets Authority (ESMA), the European Union financial regulatory agency and European Supervisory Authority who oversee the workings of the European trading market. Specifically, the restrictions will focus […]

21 March, 2020