FxOpen to drop cryptocurrency CFDs from product lineup for UK traders

FxOpen, a forex broker, announced the termination of trading contracts for difference (CFDs) on digital currencies for its UK clients. The move was explained by the UK Financial Conduct Authority (FCA) ban on selling cryptocurrency-based derivatives to retail traders, writes Finance Magnates

The FCA-regulated broker will cease supporting such products on January 5, 2021, a day before the new rules regarding CFDs and ETNs on digital currencies come into force. They apply only to retail clients of the UK arm of the FxOpen group and do not affect professional investors.

The FCA contends that crypto derivatives are unsuitable for retail traders due to insufficient understanding of their nature and the volatility of digital currencies. As a result, traders cannot fully assess the risks associated with such products.

FxOpen has informed clients of the need to close current positions by 15:00 GMT on January 5; otherwise, such positions will be forcibly closed at the prevailing market price at that time.

In 2016, FxOpen became the first among forex brokers to offer cryptocurrency CFDs. In March 2017 the firm began accepting deposits in Tether (USDT).

Earlier, the new German tax regime taking effect in 2021 will effectively ban crypto-derivative trading in the country.

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