The Financial Conduct Authority (FCA) has recently banned retail investors in the UK from trading in crypto derivatives from January 2021 referring to the “prevalence of market abuse and financial crime in the secondary market”. The FCA also took a dim view of the “extreme volatility in crypto asset price movements”
“There is clear consumer demand for the integration of crypto and other digital currencies into our lives, not least the opportunity for people to buy and sell in a new asset class safely, simply and easily. But until we clamp down on the bad actors playing in cryptocurrency, we are smothering the opportunity for crypto to go mainstream, so this move from the FCA is understandable in many ways” Says Nick Jones, CEO Founder, Zumo.
Jones goes on, “We don’t agree however with the FCA’s view that there is an “inadequate understanding of crypto assets by retail consumers” or that there is a “lack of legitimate investment need”. It’s clear from our user growth and from listening to our customers that many consumers want to invest outside the confines of the traditional system and that they certainly believe that Bitcoin does have a “reliable basis for valuation”
Meanwhile Bitcoin is on its biggest bull run since 2019 gaining 36.7% (at time of writing) on the year. One of the key drivers has been the influx of mainly US Corporates making balance sheet investments into Bitcoin such as the $50m investment by payments company Square. The crypto market is currently valued at between £250 – 300 billion globally but has an undeniable image problem due to the amount of crime that takes place in what is still a largely unregulated space.
“Without more government regulation cryptocurrency will struggle to take off in the mainstream. Many exchanges have been far too lax with their standards, providing criminals with a safe haven, putting profit before values. Across the world governments have been forced to introduce mandatory regulations, and now slowly more companies are enforcing rigorous ID and anti-money laundering checks.” – Nick Jones, Zumo’s CEO
Zumo is a decentralised payment platform and wallet app supporting GBP, Bitcoin and Ethereum with plans to open up to more cryptocurrencies and FIAT currencies. Its investors include Coldplay’s Guy Berryman, tech investor Jon Claydon and Edinburgh based Murray Capital.
A Refer and Share rewards programme for UK users is now available on the Zumo app which puts 0.02 Ethereum (£6.50) directly into the Zumo app of every user who participates with no limit on the number of referrals up to the first 5,000.