UK regulator moves to restrict borrowing for crypto investments
The Financial Conduct Authority (FCA) in the UK plans to prohibit retail investors from borrowing money to finance crypto investments, including credit card purchases. This decision aims to protect consumers from unsustainable debt, especially if crypto asset values decline. The FCA is developing a regulatory framework for the domestic cryptocurrency market, focusing on trading platforms, intermediaries, and decentralized finance (DeFi) systems. Stricter rules for retail investors will be implemented compared to those for professional investors. The FCA is addressing concerns such as market manipulation, conflicts of interest, and lack of transparency. Proposed regulations include equal trade treatment, separation of proprietary trading from retail activities, and transparency in trade pricing. DeFi systems without centralized control may be exempt from certain regulations.
