The UK's Financial Conduct Authority (FCA) has announced a policy shift, allowing retail investors to access cryptocurrency exchange-traded notes (ETNs) starting October 8, 2025. This move marks a significant change from the previous ban imposed in 2021 due to concerns over investor protection.

*Key Points of the New Regulation:*

- *Eligible Platforms*: Crypto ETNs must be listed on FCA-approved UK trading platforms, known as Recognized Investment Exchanges (RIEs).

- *Investor Protection*: Retail investors will not be covered by the Financial Services Compensation Scheme (FSCS), meaning they won't be eligible for compensation in case of platform failures or fraud.

- *Risk Disclosure*: Firms offering these products must comply with financial promotion rules and the Consumer Duty framework, ensuring transparent information and proper risk disclosures.

- *Market Evolution*: The FCA justified the shift by citing the evolution of the market since 2021, with products becoming more mainstream and better understood.¹

*Implications:*

- *Increased Access*: Retail investors will have more opportunities to engage with digital assets, potentially driving growth in the UK's crypto industry.

- *Caution*: The FCA emphasizes the high-risk nature of crypto ETNs, advising investors to be aware of potential losses.

- *Regulatory Balance*: The FCA aims to balance consumer access with safeguards, fostering innovation while preserving investor confidence and market integrity.