The Dutch regulator urged investors to refrain from trading cryptocurrency derivatives

The head of capital markets oversight and transparency at the Netherlands Financial Markets Authority (AFM) has declared crypto assets unsuitable for investment.

Paul Willem van Gerwen declaredthat despite the growing market interest in trading cryptocurrency derivatives, AFM considers such trading as fraught with risks. The regulator considers this market not mature enough compared to other derivatives markets.

According to the head of the oversight department, due to the volatility of crypto products, there is a problem in which it is not clear whether the parties to the transaction will be able to fulfill their obligations. Therefore, the representative of the regulator believes that operations with cryptocurrency derivatives should be limited to wholesale trade.

AFM does not plan to ban crypto derivatives trading anytime soon, unlike its British counterparts. However, the department can change its mind at any time, the official warns. Cryptocurrencies and crypto derivatives, in his opinion, are not at all suitable as a means of payment or investment.

Van Gerwen also mentioned the impact of the distributed ledger on clearing – cashless payments between countries, companies or banks. In such operations, according to him, the blockchain has a significant advantage over other solutions. Indeed, private traders practically do not participate in transactions. However, here, too, a situation may arise, as in peer-to-peer networks, if proprietary traders start clearing themselves, the official argues.

Earlier, the CEO of the American crypto exchange FTX.US, Brett Harrison, said that the cryptocurrency market will not reach the level of the stock market without the launch of spot derivatives.