Dutch tax official wants to ban retail investors from trading crypto derivatives

Dutch tax official wants to ban retail investors from trading crypto derivatives

However, the Dutch Authority for Financial Markets (AFM) does not yet have the authority to impose a UK-style ban.

Trading in crypto derivatives should be restricted to wholesale markets, a senior Dutch financial regulator said recently.

The comments suggest Dutch regulators want to join the U.K. in banning access to options and futures on virtual assets for ordinary retail customers, even if they do not yet have the authority to do so.

"I believe that crypto derivatives trading should be restricted to wholesale trading," said Paul-Willem van Gerwen, head of the Capital Markets and Transparency Supervision Department at the Netherlands Authority for Financial Markets (AFM). He pointed to the risks of opaque markets that are vulnerable to manipulation and other criminal activity.

Van Gerwen's remarks were made in a speech last week and posted on the AFM website Tuesday.

Van Gerwen pointed to restrictions already put in place by the U.K.'s Financial Conduct Authority in 2020 that limit trading to professional financiers, adding that this "is not yet the case" in the Netherlands.

Amsterdam is a hub for many types of financial trading - even more so since U.K. trading venues were excluded from European Union markets after Brexit.

The AFM has already proposed restrictions on retail trading in more conventional financial instruments such as turbo leverage products. The AFM does not have similar powers over crypto markets, but could get them once an EU law known as the Markets in Crypto Assets Regulation (MiCA) comes into force, an AFM spokesperson told CoinDesk.

Van Gerwen said he wanted to see more experimentation with distributed ledger technology (DLT) to support trading, which he said could lower costs. He cautioned, however, that there should always be centralized authorities in case a transaction is botched.