UK firm gets regulatory green light to offer Crypto derivatives

28 February 2019

Author : Yogita Khatri

B2C2, an electronic OTC trading firm and crypto liquidity provider, has just got the green light to offer crypto derivatives in the U.K. The London-based firm announced Thursday that its subsidiary B2C2 OTC Ltd. is now authorized and regulated by country’s financial watchdog, the Financial Conduct Authority (FCA), to arrange and deal in crypto contracts for difference (CFDs). Crypto CFDs allow traders to predict the future price change of specific cryptocurrencies, and in turn, provide an opportunity to make profit in both rising and falling markets by going long or short.

B2C2 OTC’s CFD product offers exposure to bitcoin (BTC), bitcoin cash (BCH), ether (ETH), litecoin (LTC) and XRP, according to the announcement.

Gain derivative exposure

Max Boonen, B2C2 founder and CEO, said that, with the firm’s offering, “eligible counterparties and professional clients can now gain derivative exposure to the cryptocurrency markets” and avoid the “risks associated with crypto custody.”

Issued warnings over CFDs

The FCA’s authorization of a crypto derivatives product is a notable one, as in the past it has issued warnings over CFDs. In November 2017, the authority said: “Cryptocurrency CFDs are an extremely high-risk, speculative investment. You should be aware of the risks involved and fully consider whether investing in cryptocurrency CFDs is appropriate for you.”

Financial instruments under current directives

Last April, though, the FCA said that it was likely to authorize crypto CFDs providers given that these products may be financial instruments under current directives. It said at the time: “Firms conducting regulated activities in cryptocurrency derivatives must, therefore, comply with all applicable rules in the FCA’s Handbook and any relevant provisions in directly applicable European Union regulations.”

Tighten oversight of the crypto space

The regulator has been moving to tighten oversight of the crypto space. Just last week, the FCA set out proposed guidance for how crypto assets should be regulated in the country. Yet, while aiming to protect against the perceived risks of the tech, it has taken a more positive stance on blockchain innovation, including accepting crypto startups into its regulatory sandbox.


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