French Regulators Issues New Standards For Cryptocurrency Futures Trading
The French financial markets regulators have announced that it will take strong action against unregulated cryptocurrency futures and derivative transactions.
On Thursday 22 February, the Financial Markets Authority (AMF) released a statement, saying the recent “cryptocurrency boom” has led online trading platforms to offer binary options, contracts for differences and other derivatives related to cryptocurrencies such as Bitcoin.
The AMF concluded that cryptocurrency contracts settled in cash were referred to as derivatives subjecting them to the supervision of the AMF. It also added that online trading platforms offering cryptocurrency derivatives are subject to MiFID II regulations in the European Union and faces new strict standards in reporting and business conduct.
Bloomberg reports at least two French commercial platforms, Plus500 Ltd. and IG Group Holdings Plc. had reported strong growth in their quarterly results, which they attributed in part to their cryptocurrencies futures and derivative products.
The firm’s derivatives products are currently undergoing analysis by the regulators, in compliance with the new legislation. The AMF added that, trading platforms were prohibited from announcing certain financial contracts.
Bloomberg noted that the move by the French regulators is part of a broader EU campaign against derivatives products focused on retail. EU regulators are reportedly considering prohibiting exchange platforms from marketing and selling these products to retail investors, citing volatility of such products as their major concern.
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