New plans have been announced that could mean the end of anyone trying to make money selling people products based on Bitcoin's price.
That's after City regulator the Financial Conduct Authority (FCA) proposed new rules in an effort to stop honest Brits being ripped off by people taking advantage of how few people understand this new breed of "cryptocurrencies".
FCA executive director Christopher Woolard said: "Most consumers cannot reliably value derivatives based on unregulated cryptoassets.
"Prices are extremely volatile and as we have seen globally, financial crime in cryptoasset markets can lead to sudden and unexpected losses.
"It is therefore clear to us that these derivatives and exchange traded notes are unsuitable investments for retail consumers."
As an asset - albeit a digital one - the FCA can't stop people buying Bitcoin or other cryptocurrencies directly.
However, it absolutely CAN ban people selling products based on their prices that are regulated by firms acting in, or from, the UK.
As such it's proposing stopping the sale of derivatives and exchange traded notes (ETNs) referencing certain types of cryptoassets.
Broadly speaking - that's any product sold to the public that lets you make or lose money based on a cryptocurrency's current or future price.
"We will act when we see poor products being sold to retail consumers. These are complex contracts built on top of complex assets," Woolard said.
The FCA thinks these products are "ill-suited to retail consumers" as it's not possible to reliably work out their value or the risks they involve.
More specifically there were problems thanks to the
- inherent nature of the underlying assets, which have no reliable basis for valuation
- the prevalence of market abuse and financial crime in the secondary market for cryptoassets (eg cyber theft)
- extreme volatility in cryptoasset price movements, and
- inadequate understanding by retail consumers of cryptoassets and the lack of a clear investment need for investment products referencing them
Put together the FCA said that meant consumers could "suffer harm from sudden and unexpected losses if they invest in these products".
"We estimate the potential benefit to retail consumers from banning these products to be in a range from £75 million to £234.3 million a year," the FCA said.
