UK’s FCA to Lift Ban on Crypto ETNs for Retail Investors

• Michael Willson
• June 13, 2025

The UK’s Financial Conduct Authority (FCA) has announced plans to lift its ban on crypto exchange-traded notes (ETNs) for retail investors. This decision, currently under public consultation, is set to open up new opportunities for individual investors looking to gain exposure to digital assets through regulated financial products. If you’ve been wondering when UK retail investors could finally access crypto ETNs, the answer is: very soon.

Why the FCA’s Decision Matters

Since 2021, retail investors in the UK were prohibited from trading crypto ETNs, leaving them with limited options for getting exposure to the crypto market through traditional finance channels. This restriction was originally put in place due to concerns about investor protection and market volatility. However, the FCA’s latest move signals a shift towards more inclusive access, while maintaining a focus on risk management.

The FCA’s consultation is open for public comment until July 7, 2025. Once finalized, this change could align the UK more closely with the United States, where retail investors already have access to crypto ETFs. It also differentiates the UK from the European Union, where crypto ETNs are regulated differently.

What Does the New Proposal Include?

Under the FCA’s new proposal, crypto ETNs would be available to retail investors, but only on FCA-approved exchanges. Additionally, financial promotion rules would require issuers to provide clear and prominent risk disclosures. This means that while access is being expanded, investor safety remains a top priority.

It’s important to note that other restrictions, such as the ban on crypto derivatives, will remain in place. Retail investors still won’t be able to trade products like crypto futures or options. Furthermore, crypto ETNs will not be covered under the UK’s Financial Services Compensation Scheme, so investors won’t have a safety net if something goes wrong.

How the UK Compares to Other Markets

It’s helpful to see how the UK’s move stacks up against other major financial markets. Let’s compare the UK’s approach to those in the US, EU, and Switzerland.

Retail Crypto ETNs Across Major Markets

Region	Retail Access	Derivatives Allowed	Notable Features
UK (FCA)	Ban lifted (pending)	No	Only on FCA-approved exchanges; strict promotions
US (SEC)	Spot crypto ETFs allowed	Limited	SEC-approved ETFs, active since 2024
EU (MiCA)	Varies	Regulated under MiCA	Regulatory differences by country
Switzerland (FINMA)	Regulated ETNs/ETPs	No	Safe, regulated exposure

This table shows that the UK is joining the US and Switzerland in allowing regulated access to crypto ETNs, though each jurisdiction has its own unique rules.

Key Considerations for Investors

If you’re a retail investor considering crypto ETNs, there are a few important things to keep in mind:

• Risk Disclosure: Under the FCA’s proposal, financial promotion rules require clear communication of the risks involved. Crypto markets can be highly volatile, and investors should be prepared for price swings.

• No Compensation Coverage: Crypto ETNs won’t be protected under the Financial Services Compensation Scheme. If an issuer fails or the ETN loses value, investors may have no recourse.

• Limited Product Scope: While crypto ETNs will be available, derivatives like futures and options will remain off-limits to retail investors.

Potential Benefits for Retail Investors

The FCA’s decision could make it easier for everyday investors to participate in the crypto market without directly holding cryptocurrencies. Crypto ETNs offer a way to gain exposure to digital assets through regulated channels, often with lower fees and easier tax reporting compared to holding coins directly.

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Challenges and Gaps to Address

While the FCA’s move is a positive step, there are still areas that need more work. One major gap is the lack of clear information on fees and product costs. Investors will want to compare crypto ETNs to other investment vehicles, like ETFs or direct crypto holdings, to see which option offers the best value.

Another challenge is the timeline for implementation. The consultation ends in July 2025, but the FCA hasn’t provided a specific date for when retail investors can start trading crypto ETNs. It’s also unclear whether any legislative changes will be needed to finalize the new rules.

Key Gaps in the FCA’s Crypto ETN Proposal

Gap	Why It Matters
Fee Transparency	Investors need to compare costs to other options
Timeline Clarity	No specific start date for retail access
Compensation Scheme	No protection under FSCS
Market Education	Investors need clear guidance on product use

This table highlights the key areas where investors need more information before diving in.

Conclusion

The FCA’s proposal to lift the ban on crypto ETNs is a big step forward for retail investors in the UK. It opens the door to regulated, exchange-traded exposure to digital assets, aligning the UK with other major markets. However, there are still important questions about fees, investor protections, and implementation timelines that need to be answered. For now, the FCA’s move is a welcome sign that the UK is ready to embrace innovation in the crypto space—while still focusing on safety and transparency.