Crypto ETNs will soon be available to UK retail investors, FCA says

(Sharecast News) - The UK financial regulator announced on Friday that it is planning to allow retail investors to access crypto exchange traded notes (cETNs), lifting a ban on market that has been in place for more than four years. In January 2021, the Financial Conduct Authority banned the sale, marketing and distribution of derivatives and ETNs that reference unregulated transferable cryptoassets to retail clients.

After announcing in March 2024 that it would allow investment exchanges to create a UK-listed market segment for cETNs for professional investors, the FCA has been consulting on proposals to lift the ban on retail access for the past two months.

The development comes as the regulator continues to figure out a regulatory framework for cryptoassets.

"Since we restricted retail access to cETNs, the market has evolved, and products have become more mainstream and better understood," said David Geale, executive director of payments and digital finance at the FCA.

"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."

The FCA said that, as long as cETNs are traded on an FCA-approved investment exchange based in the UK, retail consumers will be able to access them.

Investment exchanges must make sure they meet regulatory standards, including ensuring that consumers aren't offered "inappropriate incentives to invest".

A ban on cryptoasset derivatives, however, will remain in place, the FCA said on Friday.