UK Proposes Ban on Borrowing to Invest in Crypto
The post UK Proposes Ban on Borrowing to Invest in Crypto appeared on BitcoinEthereumNews.com. UK’s FCA to ban retail investors from borrowing money via credit cards to buy crypto. New rules target trading platforms, lenders, and DeFi to curb market abuse and protect consumers. Retail access to high-risk crypto services will be restricted, and firms must register and operate under UK oversight. The UK’s Financial Conduct Authority (FCA) has proposed to stop consumers from borrowing money, including using credit cards, to invest in cryptocurrencies. The measure is part of a wider set of rules to bring most of the crypto market under the regulator’s oversight for the first time. The FCA cited growing concerns about unsustainable debt levels and consumer vulnerability as key reasons for proposing the crypto borrowing ban. These specific worries become especially sharp when crypto asset values fall unexpectedly. A recent YouGov survey backs this up revealing that in the 2022-’23 period, the proportion of UK consumers using borrowed funds to buy crypto rose from 6% to 14%. Platform Requirements Under New Rules The new proposals aim to regulate trading platforms, intermediaries, lenders, and decentralized finance (DeFi) systems if there is a “clear controlling person.” Companies wanting to offer crypto services to users in the UK must operate through a legal entity authorized right there in the country. Retail investors will also be barred from accessing high-risk crypto lenders, such as Celsius Network, which collapsed in 2022. Additionally, staking services must reimburse users for losses resulting from third-party actions. The FCA will require crypto platforms to: Treat all trades equally Separate proprietary trading from client trading Ban payments to intermediaries for order flow Ensure pricing and trade execution transparency Related: FCA Targets 2026 for UK Crypto Regulation as 7 Million Users Drive Demand Stricter Rules for Retail vs. Professional Investors Meanwhile, retail investors will face tighter restrictions than professionals. However, individuals…
The post UK Proposes Ban on Borrowing to Invest in Crypto appeared on BitcoinEthereumNews.com.
UK’s FCA to ban retail investors from borrowing money via credit cards to buy crypto. New rules target trading platforms, lenders, and DeFi to curb market abuse and protect consumers. Retail access to high-risk crypto services will be restricted, and firms must register and operate under UK oversight. The UK’s Financial Conduct Authority (FCA) has proposed to stop consumers from borrowing money, including using credit cards, to invest in cryptocurrencies. The measure is part of a wider set of rules to bring most of the crypto market under the regulator’s oversight for the first time. The FCA cited growing concerns about unsustainable debt levels and consumer vulnerability as key reasons for proposing the crypto borrowing ban. These specific worries become especially sharp when crypto asset values fall unexpectedly. A recent YouGov survey backs this up revealing that in the 2022-’23 period, the proportion of UK consumers using borrowed funds to buy crypto rose from 6% to 14%. Platform Requirements Under New Rules The new proposals aim to regulate trading platforms, intermediaries, lenders, and decentralized finance (DeFi) systems if there is a “clear controlling person.” Companies wanting to offer crypto services to users in the UK must operate through a legal entity authorized right there in the country. Retail investors will also be barred from accessing high-risk crypto lenders, such as Celsius Network, which collapsed in 2022. Additionally, staking services must reimburse users for losses resulting from third-party actions. The FCA will require crypto platforms to: Treat all trades equally Separate proprietary trading from client trading Ban payments to intermediaries for order flow Ensure pricing and trade execution transparency Related: FCA Targets 2026 for UK Crypto Regulation as 7 Million Users Drive Demand Stricter Rules for Retail vs. Professional Investors Meanwhile, retail investors will face tighter restrictions than professionals. However, individuals…
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