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Dutch Finance Official: Ban Retail Trading of Crypto Derivatives

Retail investors should not be allowed to trade crypto derivatives, according to a Dutch financial official.

In a speech at the Amsterdam Propriety Traders Managers Meeting, Paul-Willem van Gerwen, an executive at The Netherlands Authority for the Financial Markets, discussed crypto derivatives.

Market manipulation, illegal financial behavior, and a lack of transparency are among the grounds for the proposed prohibition, according to him.

Crypto derivatives, according to Van Gerwen, are popular products with hazards, including lack of transparency, market manipulation, and “other types of criminal behavior.”

These are the most prevalent counter-arguments to the crypto market in general, albeit although the second has some merit, the other two are less so.

He also claims that there is a disconnect between the popularity of derivatives and the market’s maturity.

As a result, he wants crypto derivatives to be limited to wholesale dealings only. He cites the FCA in the United Kingdom, which prohibits them. Furthermore, van Gerwen addressed the impact of blockchain technology on clearing, stating that he does not believe it would be as beneficial as claimed.

Regardless, crypto derivatives are gaining popularity.

Crypto derivatives are extremely popular in the market, despite the fact that they are high-risk investments that can result in significant losses. Goldman Sachs made its first OTC crypto trade in the derivatives market in March, demonstrating the market’s growing popularity.

Some have said that the market is misunderstood, such as FTX CEO Sam Bankman-Fried. They provide liquidity and improve market efficiency, according to the premise.

Several other exchanges are preparing to enter the market. Coinbase has applied to trade futures and derivatives, and FTX US expects to do so this year.

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Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.