The Financial Conduct Authority confirmed on last Friday that it would regulate derivatives. The FCA does not currently regulate cryptocurrencies but this does not mean that they cannot be used, accidentally or otherwise, in or as part of regulated products or services. A prime example of this is trading in derivatives which is a very highly regulated activity.

'It is likely that dealing in, arranging transactions in, advising on or providing other services that amount to regulated activities in relation to derivatives that reference either cryptocurrencies or tokens issued through an initial coin offering (ICO), will require authorisation by the FCA.'

Last year, the FCA published a warning to cryptocurrency investors, followed by another warning the following month about investing in cryptocurrency (contracts for difference).

You can even scroll down to our 8th February blog entry to see another FCA confirmation that cryptocurrency may be regulated (and more detail on why).

Many have argued that the FCA has not said anything new in this latest statement. In essence, this is true but these warnings are becoming increasingly concrete – with more examples that are specific and fewer grey areas. You can expect more to come in the future.