Key Takeaways
- The U.K.’s financial watchdog will now allow crypto-linked exchange-traded notes to be sold to retail investors, ending a four-year ban.
- Ordinary investors now have a regulated route to gain exposure to bitcoin and other digital assets without directly holding them.
- The U.K. crypto industry has welcomed the lifting, but many state there is still a lot of work to be done.
Britain’s financial regulator has lifted its four-year ban on the sale of crypto-linked exchange-traded notes (ETNs) to retail investors.
The move marks a significant softening of the Financial Conduct Authority’s stance on crypto investment products and brings the U.K. closer in line with other European markets where such products have long been available.
FCA Lifts Ban On Crypto ETNs
On Wednesday, Oct. 8, the Financial Conduct Authority (FCA) once again allowed recognised investment exchanges to list crypto ETNs for all investors, overturning its 2021 decision that barred sales to retail customers on consumer protection grounds.
Crypto ETNs are debt securities that track the price of crypto such as Bitcoin or Ethereum, offering exposure without requiring investors to directly hold the tokens themselves.
FCA Executive Director of Payments and Digital Finance David Geale said:
“Since we restricted retail access to cETNs, the market has evolved, and products have become more mainstream and better understood.
“In light of this, we’re providing consumers with more choice, while ensuring there are protections in place.
This should mean people get the information they need to assess whether the level of risk is right for them.”
Eager Young Investors
The FCA’s decision to lift its ban on crypto ETNs comes amid growing appetite for regulated crypto exposure among U.K. investors, particularly younger ones.
A survey shared with CCN by trading platform IG found that 30% of adults said they were open to investing in crypto ETNs, rising to 50% among 18- to 24-year-olds.
Those figures are far higher than current levels of crypto ownership.
A 2024 FCA survey found that only 12% of Britons currently hold crypto assets, with average holdings of around £1,842.
The IG report also noted that potential tax advantages linked to ETN investments may further boost demand now that the products are set to return to U.K. exchanges.
Crypto Industry Reacts
Nick Jones, Founder and CEO of Zumo
“It’s of course an extremely welcome development for the industry, and a real sign the regulator recognises both growing investor appetite and the potential of the crypto sector to open up new opportunities.”
“At the same time, and amidst all the excitement, it’s important to remember that while cETNs are a valuable new wrapper, they are, at the end of the day, debt securities.
“The real test will be the quality of the issuers, transparency into how the products are structured, and the robustness of the disclosures.”
Victor Padee, CRO at Aevi
“For crypto payments to evolve in a meaningful way, access alone is simply not enough: trust, simplicity, usability and security must follow closely.
“[…]as crypto-linked financial products become more and more accessible to retail investors, the supporting payment infrastructure will also need to evolve.
“Now the FCA has opened the door to a broader participation, so it’s time for the industry to ensure consumers are, and feel, protected as well as empowered enough to embrace it, the only way forward is making sure consumers are able to trust every transaction.”
Harvey Knight, Head of the UK Financial Services Regulatory Team at Withers
“This policy is more nuanced and cautious than it may first appear.
“The FCA is not authorising or promoting direct ownership of crypto nor is it permitting retail access to crypto derivatives.
“The products must be structured as ETNs traded on a recognised investment exchange, which retail customers should be aware embeds counterparty/issuer risk rather than true asset ownership.
“There are rumours that the delay has come because of the regulator and LSE not agreeing as to whether a new exchange segment is needed for these retail-facing crypto ETNs.
“The delay is not necessarily a mere operational blip but quite symptomatic of how the U.K. has handled its approach to crypto and digital assets more generally.
“This move reflects a very calibrated approach as the FCA is effectively saying that retail can have access to crypto-linked financial products but only through tight guardrails.”
Daniel Gold, CEO of Stratiphy
“Investors across Europe have been enjoying access to crypto within a regulated framework, and the U.K. is finally catching up.”
“As investor demand grows and more people look to join this market, it is important that the investment industry provides a range of solutions that meet the varying capabilities and skillsets of those represented.”
“The industry needs to do more to open up access to high-quality and personalised investment tools if we are to truly democratize crypto markets for everyone.”
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Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
