FCA proposes lifting ban on crypto ETNs for retail investors

The UK’s Financial Conduct Authority (FCA) has proposed lifting the ban on offering crypto exchange-traded notes (ETNs) to retail investors. If approved, individual investors in the UK would be able to access crypto ETNs traded on recognized exchanges.

The FCA emphasized that normal financial promotion rules would apply, ensuring consumers receive full information about the risks and are not encouraged to invest through inappropriate incentives. David Geale, FCA’s Executive Director of Payments and Digital Finance, said the move aims to rebalance risk approaches and give people the choice to invest in high-risk products if they wish.

The ban was introduced in January 2021, based on the FCA’s view that retail investors did not have a legitimate need for these products. However, after more than four years, the FCA believes lifting the ban will support growth and improve the competitiveness of the UK’s crypto industry. The ban on crypto derivatives for retail investors will remain in place.