FCA Unlocks Crypto ETNs for UK Retail Investors

• FCA now permits UK retail investors to access crypto ETNs listed on recognised exchanges, ending years of limited institutional access.
• Crypto ETNs must meet strict Consumer Duty and promotion rules, offering transparency while warning of market volatility and no FSCS coverage.
• This decision aligns the UK with global crypto markets and could boost liquidity while improving investor safety and regulated participation.

The UK recently opened a avenue for individual cryptocurrency investors. For the first time, the Financial Conduct Authority (FCA) has made cryptocurrency exchange-traded notes (ETNs) available to regular consumers. Only ETNs listed on recognized investment exchanges certified by the FCA are affected by this move. Compared to earlier regulations that only permitted professional clients to trade these assets, the change represents a significant increase.

The FCA confirmed that crypto ETNs must meet strict Consumer Duty standards to protect investors. Companies must also follow financial promotion rules. Hence, all product information must be accurate, clear, and not misleading. This move follows a public consultation earlier this year and aims to expand regulated access without sacrificing investor safety.

FCA Stresses Risk and Investor Responsibility

The FCA made one thing clear—crypto markets remain highly volatile. Therefore, consumers must fully understand the risks before investing in these products. Besides, the Financial Services Compensation Scheme will not cover crypto ETNs. Consequently, investors must accept full responsibility for any losses they may incur.

The FCA will also keep an eye on all promotional material to guarantee accuracy and impartiality. Businesses that use deceptive advertising or provide inadequate disclosures will be held accountable. However, ordinary investors are still unable to purchase cryptocurrency derivatives like futures and options. High-risk assets are still being examined by the FCA, which will revise its stance as necessary.

Aligning With Global Crypto Standards

The FCA’s move brings the UK in line with the U.S., Canada, Hong Kong, and the EU. All these markets already offer structured crypto investment products to retail traders. Earlier this year, London listed professional-only crypto ETNs from 21Shares, WisdomTree, and Invesco. However, they saw low trading volumes compared to U.S. ETFs.

Laurent Kssis, CEO of CEC Capital, welcomed the move. “The FCA’s move to allow retail access to crypto ETNs on UK exchanges marks a major turning point,” he said. Kssis believes this shift aligns the UK with international best practices and offers retail traders a safer option.

“This guarantees institutional-level transparency and oversight that retail traders just do not receive when accessing crypto directly,” he continued. This could therefore increase liquidity and rebuild consumer confidence in the UK cryptocurrency markets.