UK FCA Proposes Lifting 2021 Ban on Retail Crypto ETNs; Consultation Open Through July 31

The UK's Financial Conduct Authority (FCA) has proposed lifting its ban, in place since 2021, on retail investors buying crypto exchange-traded notes (ETNs). The proposal would allow individual investors to access ETNs tied to cryptocurrencies, provided these products are listed on FCA-recognized investment exchanges, such as the London Stock Exchange, and comply with financial promotion rules.

According to David Geale, executive director of payments and digital assets at the FCA, "We want to rebalance our approach to risk and lifting the ban would allow people to make the choice on whether such a high-risk investment is right for them given they could lose all their money." The consultation on the proposal is open through July 31.

The change does not extend to spot crypto exchange-traded funds (ETFs), which remain prohibited for retail investors in the UK. The FCA's ban on retail trading of cryptoasset derivatives also remains in force.

If approved, the new rules would bring the UK closer to the regulatory approach of the European Union, where retail access to crypto ETNs is already permitted.

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