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crypto.news 2025-05-02 12:49:56

UK’s chief financial regulator proposes bans on buying crypto with debt

UK regulators plan to ban retail investors from buying crypto assets with debt, citing financial risk and volatility. The UK is introducing sweeping rules for crypto, including a ban on buying these risky assets with debt. On Friday, May 2, the UK’s Financial Conduct Authority published a new document proposing new rules for crypto assets. The ban would include purchases made with credit cards, e-money, and any other form of debt. According to the regulators, the goal is to protect consumers in the event that these volatile assets decline in value. In addition, retail investors will be barred from engaging with certain crypto lending platforms, which the regulator deems high-risk. You might also like: U.S. House hearing reignites crypto regulation push, hopes for clarity ‘this year’ At the same time, the regulator outlined new rules for crypto platforms. For one, crypto companies would be required to establish a legal entity in the UK and fall under UK regulatory oversight. Specifically, the regulations would mandate transparent pricing and the segregation of platform assets from those of users. Moreover, the proposed regulation would ban payment for order flow, citing the potential for misuse. The practice refers to brokers directing their clients’ orders to selected market makers, potentially creating conflicts of interest. UK is ‘open for business’: FCA director David Geale, FCA executive director of payments and digital finance, stated that these regulations aim to provide investor protections. However, he dismissed claims that the country was cracking down on the crypto industry. “Crypto is an area of potential growth for the UK but it has to be done right. To do that we have to provide an appropriate level of protection,” David Geale, FCA. You might also like: A way out or a way around? Rethinking A16z’s crypto regulation Proposal He compared crypto with other high-risk assets and noted that, in many cases, crypto regulations offer even less protection. However, he emphasized that the country is welcoming toward crypto trading and innovation. “I would in some ways compare this to any other high-risk investments, which if anything often have less protections . . . We are open for business” You might also like: ‘Massive year for crypto in the U.K.’: London unveils sweeping crypto rules, eyes regulatory ties with USA

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