Last week’s blanket banning of cryptocurrency derivatives by the United Kingdom’s Financial Conduct Authority ignored 97% of respondents to its consultation, according to the FCA’s own policy statement.
The 527 respondents included exchanges and companies involved in crypto assets and derivatives, trade bodies, national competent authorities, legal representatives and individuals.
The 97% who opposed the FCA proposed ban argued that crypto assets do have intrinsic value, retail investors are capable of assessing this value, and that other measures could achieve the desired results without applying a “disproportionate” ban.
In his blog, Attack of the 50 Foot Blockchain, crypto-sceptic David Gerard suggested that this was an example of “Crypto derivatives peddlers [thinking] they could spam the process, and they were wrong.”
Certainly, the responses came from a “range of stakeholders” covering the U.K. crypto industry. However, it would be more than a little incongruous if a consultation on crypto derivatives elicited a large response from parties with no stake in the outcome, as Gerard would seem to prefer.
An article published on buyshares.co.uk also accuses the FCA of cherry-picking its data.
Despite acknowledging that 60% of outcomes from trading crypto-ETNs between June 2015 and April 2019 were profitable, the FCA report deems this period unsuitable for consideration due to its inclusion of Bitcoin’s late-2017 run to its all-time high.
Instead, the report focuses on a period from April 2018 to December 2019, during which 57% of crypto-ETN clients lost money.
Buyshares.co.uk researcher Justinas Baltrusaitis also points out that during the period from April 2018 until today, an even greater number of investors would have lost money on the FTSE100, which has dropped 20% in value, adding:
“One wonders whether the FCA's decision to ban cryptocurrency derivatives is a politically motivated one that will absolve responsibility of the FCA with regards to cryptocurrencies. As opposed to setting out a long-term strategy that will safeguard both UK investors and the blockchain innovation at large.”