The Financial Conduct Authority has cleared the path for retail investors in the UK to access crypto exchange-traded notes, or ETNs, starting October 8. These products, which track the price of assets like Bitcoin and Ethereum, will now be available through Recognised Investment Exchanges. This officially ends a ban that has been in place since January 2021.
The original ban was meant to protect consumers from sharp price swings and unclear pricing. But regulators now believe the market has developed enough safeguards to revisit that decision. With professional investors already trading crypto ETNs in the UK since 2024, the FCA sees no reason to keep retail investors entirely shut out.
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Only ETNs listed on recognised UK exchanges will qualify, and any firm offering them must comply with the full range of Consumer Duty obligations. That includes making sure promotions are clear and appropriate, performing suitability checks, and being upfront about the risks. There’s no safety net from the Financial Services Compensation Scheme either, so investors will need to tread carefully.
Plenty of European countries have let retail investors trade crypto ETPs for years, including Germany and Switzerland. This decision helps bring the UK more in line with those markets. It also tracks with moves seen recently in the US and EU, where spot crypto funds are now available to everyday investors.
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Crypto ETNs are not the same as buying actual Bitcoin or Ethereum. They are debt securities that track the price of crypto assets, without giving holders any claim to the tokens themselves. And since they’re unsecured, there’s no guarantee you’ll get your money back if the issuer fails. That risk is something the FCA wants investors to understand upfront.
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The regulator made one thing clear: crypto derivatives are not coming back for retail. The FCA still sees them as too risky and too complex for the average investor. That ban will remain in place, with no signs of change anytime soon.
The policy kicks in this autumn, and all eyes will be on how many issuers step up with compliant offerings. It’s also unclear how much demand there will be from retail investors. The FCA is watching closely to see if the protections in place do their job, or if further restrictions need to be added later.
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The post FCA Opens the Door to Crypto ETNs for UK Retail Investors appeared first on 99Bitcoins.
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