The UK’s Financial Conduct Authority (FCA) is set to prevent retail investors from borrowing funds for cryptocurrency investments, according to a report by the Financial Times. The FCA's executive director, David Geale, emphasized the necessity of consumer protection while acknowledging the growth potential in the crypto sector. He clarified that the FCA is not antagonistic towards crypto but is cautious due to high-risk factors associated with the market. The upcoming regulations aim to prohibit credit use in crypto purchases, including credit card transactions, motivated by concerns over potential unsustainable debt if asset values decline. Current FCA research indicates that, while most crypto purchases are made with disposable income, the trend toward credit usage is rising. The FCA also intends to regulate crypto trading platforms comprehensively, addressing issues such as market manipulation and conflicts of interest. Further regulations will include enforcing transparent trading practices and ensuring equal treatment for retail investors. The FCA plans to exempt decentralized finance (DeFi) systems with no clear controlling authority from these rules.

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