The British regulator, the Financial Conduct Authority (FCA), has given out a warning to investors against venturing into cryptocurrency contracts for differences (CFDs). The agency claimed that digital currency-based CFDs are considered to be high-risk investments.

On the flip side, CEO and Chairman Terry Duffy of CME groups expect Bitcoin derivatives trading to begin as soon as the 2nd week of December.

Futures contracts are part of a recent tidal shift to professionalize bitcoin. CME made the headlines after disclosing it was in the process of approval for a new cash-settled Bitcoin derivative product planned for the fourth quarter of 2017.

Notably, Terry Duffy addressed the issue of coping with excessive volatility in bitcoin markets. He explained the exchange would consider halting trading in cases of wild price fluctuations in addition to calling in rules already in place for handling shocks for other products.

However, on the contrary, the FCA handed out its cautionary briefs to investors against investing in crypto-based CFDs owing to several risks that they could face. Among the risks are price volatility, leverage, charges and funding costs and price transparency.

The agency further mentioned that investors should judiciously scrutinize if venturing into virtual currency CFDs is appropriate or not. It claimed that the legal safeguards currently in place cannot protect them and will not compensate them for any losses that they could incur from trading.

"Cryptocurrency CFDs are an extremely high-risk, speculative investment as CFDs likely to deliver much higher leverage than the conventional method of trading. Usually, the standard leverage in the CFD trading begins as low as a 2% margin requirement. Depending on the underlying asset, margin requirements may shoot up exponentially. You should be aware of the risks involved and fully consider whether investing in cryptocurrency CFDs is appropriate for you."