AFM's Gerwen implies that individual investors should avoid crypto derivatives trading.
The head of AFM Paul-Willem van Gerwen stated that the crypto derivatives exchange should be limited to the wholesale trade only. He outlined several reasons, including the danger of any illegal conduct, lack of transparency, and market manipulation.
As crypto derivatives trading is gaining momentum in the market, the AFM considers such trades risky and suggests that the market is not developed well enough. The problem that arises due to the crypto-related products' instability questions whether “the parties to the derivative transaction will be in a position to fulfill their promises.”
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However, Gerwen also noted several positive things. During the Amsterdam Proprietary Traders Managers Meeting, he expanded on the importance of utilizing blockchain in clearing operations, while also adding:
“In principle proprietary traders don’t get involved in clearing. And yet the technological developments could lead to a situation in which a peer-2-peer model arises, with proprietary traders possibly starting to engage in clearing themselves.”
However, the Dutch regulator said that cryptocurrency cannot be held as an acceptable payment or investment method, at least for now.
Even though the UK has already banned various cryptocurrency exchanges and closed down crypto ATMs, the AFM has not yet followed this path. Instead, the Authority gave a warning and suggested the public not take part in retail trading. “Don’t get caught up in the excitement of this trading, don't let yourself be tempted into retail trading," Gerwen added.