I haven't heard anything about this, as I don't live in the UK and don't follow news. Can you give me a TL;DR?
The UK Financial Conduct Authority (FCA) is currently investigating banning the trading of crypto
derivatives to retail customers. This is not a new way of looking at derivatives. Retail is generally for vanilla products, e.g. a purchase of stocks/shares or buying foreign exchange. These are most often bought by Joe Public in an Over the Counter trade, that is buying without the need for an Exchange. That might be just a high street shop that changes currency.
Derivatives are Exchange traded and exchanges are regulated and trades carried out by trained and qualified professionals who have the ability to understand the complexity of the derivative product (CDP, CFD, Options, Futures, etc.) The issue with letting the public buy derivatives is they probably haven't got a clue how the products work and no idea how the risk profile of them can be assessed or how they can be accurately valued - so will lose their money hard. Add in the fact all crypto us hugely volatile, retail customers likely will not have the margin to hold these assets without getting taken out by aggressive institutional investors.
This happens a lot, especially in short selling, spread betting, etc. where small traders get shaken out by intentional / engineered market moves by the whales. We see this in crypto too.
CBF