U.K. to Lift Ban on Retail Crypto ETNs from October

The U.K.’s Financial Conduct Authority (FCA) will allow retail investors to buy crypto exchange-traded notes (cETNs) starting October 8, reversing a 2021 ban that cited investor protection concerns.

This policy shift comes as global interest in crypto investment products grows and markets mature. The FCA said retail access will be permitted if cETNs are listed on recognized, FCA-approved U.K.-based exchanges. Issuers must comply with strict financial promotion rules to prevent misleading advertising and avoid offering inappropriate incentives. Additionally, the FCA’s Consumer Duty rules will apply, requiring firms to act in the best interest of customers and avoid foreseeable harm.

While the decision opens the door for broader retail participation, the FCA warned that these products will not be covered by the Financial Services Compensation Scheme, meaning investors will not have recourse for losses. The regulator emphasized that cETNs remain high-risk and are not suitable for all investors, urging potential buyers to understand the volatility and complexities involved.

The move follows the rapid expansion of crypto exchange-traded funds (ETFs) in other markets, particularly the U.S., where products have attracted significant capital. According to SoSoValue, U.S.-listed crypto ETFs now hold $146.4 billion in total net assets, underscoring the growing institutional and retail demand for regulated crypto investment vehicles.

By aligning its rules more closely with global trends, the FCA aims to provide U.K. investors with safer, regulated access to crypto markets while maintaining strong investor safeguards. Market participants view this as a major step in integrating digital assets into mainstream finance, potentially increasing liquidity and adoption in the U.K.’s crypto sector.