UK-based FX brokerage firm AT Capital Markets (ATFX) has added four new cryptocurrency contracts for difference (CFDs) to its growing list of financial products. ATFX customers can now trade in CFDs with four of the top 10 most popular cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Ripple’s XRP.
With the new offering, cryptocurrency investors will have the option to open long and short positions for their chosen asset, access competitive spreads and benefit from the protection of segregated funds.
Commercial Director of ATFX, Marcos Tigsilema, claim the CFD’s provide a cost-effective way for traders to profit from the crypto market without having to deal with risky exchanges which are prone to cyber attacks.
“Funds can be deposited and withdrawn with ease, avoiding the risks of purchasing cryptocurrencies directly through an exchange,” he said.
Contracts for difference are a controversial derivative trading product that has drawn much speculation in the UK financial sector lately. While they provide a more convenient way for traders to invest in cryptocurrency, many consider them to be a high-risk instrument with potential for abuse from financial service providers.
In March last year, the European Securities and Markets Authority (ESMA) set out stricter rules to regulate the issuance of CFDs within the European Union. The rules, aimed to protect consumers, include limits on the amount leverage that can be offered, a standardized risk warning, a margin close-out rule and a restriction on incentives offered. The rules were recently renewed for an additional three months, beginning February 1, 2019.
In November last year, UK regulator the Financial Conduct Authority (FCA) announced it will be considering an outright ban on the sale of cryptocurrency derivatives to retail customers, including CFD’s, options, futures, and securities. The consideration was based on its belief that the largely unregulated nature of cryptocurrencies makes them an especially high-risk asset class.