Published on November 15th, 2017 | by bitcoin0
Cryptocurrency Derivatives: A Warning from UK Finance Regulator
A U.K. finance regulator has warned consumers about a particular kind of derivative contract based on cryptocurrencies.
In a release on its website, the U.K. Financial Conduct Authority (FCA) cautioned would-be investors in cryptocurrency contracts-for-differences, or CFDs.
Under a CFD, the two parties involved agree to pay either side in the event that the underlying value of an asset – in this case, an amount of cryptocurrency – changes over time.
The agency 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.”