The U.K.’s financial watchdog has warned that companies offering services around cryptocurrency derivatives “likely” need to be authorized by the agency.

In a statement posted to its website Friday, the Financial Conduct Authority (FCA), said that although it doesn’t consider cryptocurrencies to be currencies or commodities for regulatory purposes, cryptocurrency derivatives may be financial instruments under current directives.

The statement said:

“Firms conducting regulated activities in cryptocurrency derivatives must, therefore, comply with all applicable rules in the FCA’s Handbook and any relevant provisions in directly applicable European Union regulations.”

The FCA continued to explain that it’s “likely” that companies seeking to offer derivatives linked to cryptocurrencies or tokens issued through ICOs will need to obtain authorization. The products mentioned include cryptocurrency futures, cryptocurrency contracts for differences (CFDs) and cryptocurrency options.

The agency added, however, that an ICO “may or may not fall within the FCA’s regulatory purview depending on the nature of the tokens issued.”

The FCA finished with a warning that states: “If your firm is not authorized by the FCA and is offering products or services requiring authorization it is a criminal offence. Authorized firms offering these products without the appropriate permission may be subject to enforcement action.”

While the FCA has been generally positive on blockchain technology, saying in 2016 that it does not plan to regulate the blockchain industry for now as it believes it needs “space” to grow, it has taken a sterner stance on cryptocurrency and ICOs.

In December 2017, the head of the authority, Andrew Bailey, warned bitcoin investors to be prepared to “lose all your money,” adding the risks are similar to gambling.

The same month, the FCA announced that it would gather evidence and conduct a deeper examination on ICOs. In a feedback statement, the regulator said it would carry out an analysis on the applicability of U.K. laws to the ICO funding model and assess if there is need for “further regulatory action.”

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