The Financial Conduct Authority (FCA) in the United Kingdom has shuttered 21 firms offering contracts for difference (CFD) since 2025, three others were cancelling their regulatory permissions to trade, and two face investigation after a crackdown on misleading customers, according to Reuters.The regulator did not name the firms involved in the crackdown.A Wider Crackdown on CFDsHowever, it confirmed that the crackdown happened on CFD firms that do negligible business in the country, yet trade on the reputation of an FCA licence to vouch for affiliated businesses based abroad. That arrangement led people to think they were dealing directly with a UK-regulated firm and would benefit from UK protections, when the actual counterparty was an offshore entity outside the FCA's supervision.In late 2024, the FCA revealed that around 20 per cent of locally regulated CFD brokers were inactive, calling them “halo” firms."Consumers need to know exactly who they're dealing with and what protections they have," Dominic Holland, the FCA's director of sell-side supervision, said in a statement. He added that the regulator intervenes whenever firms blur the lines between their UK-regulated activities and their overseas businesses.Finance Magnates earlier reported that, as of 1 December 2025, 74 brokers in the country could offer CFDs to retail clients.An Action Induced by Growing Losses?Friday's tally extends a longer pattern of scrutiny. The FCA restricted CFD sales to retail clients in 2019 after European regulators found most retail traders lost money on the products. The sector has also faced repeated FCA letters and reviews since then. Under Consumer Duty rules introduced in 2023, and guidance reinforced in late 2025, firms were told to demonstrate fair value and clearer disclosure to customers."We will not hesitate to take swift and assertive action where we identify harm," Sarah Pritchard, the FCA's executive director of markets, said in an earlier letter setting out expectations for CFD providers.Last year, the British regulator highlighted the risk of “finfluencers” promoting unregulated offshore CFD brokers, detailing that more than 90,000 investors collectively lost about £75 million over four years with only one such firm. This article was written by Arnab Shome at www.financemagnates.com.