The UK Financial Conduct Authority (FCA) will permit retail investors to access cryptocurrency-backed exchange-traded notes (ETNs) from October 8, 2025. This historic reversal of a 2021 ban applies exclusively to products traded on FCA-approved UK Recognized Investment Exchanges (RIEs), while the prohibition on crypto derivatives remains unchanged.
FCA Executive Director David Geale stated: "The cryptocurrency ETN market has evolved; products are more widely available and better understood. This allows us to offer consumers more choice while ensuring necessary protections." However, investors will not be covered by the Financial Services Compensation Scheme (FSCS), eliminating government-backed loss protection. Product promotions must comply with financial promotion rules to prevent unsuitable incentives, and issuers must adhere to Consumer Duty regulations requiring fair treatment and needs-based product design.
The decision reflects the regulator's assessment of improved market maturity since 2021, driven by growing institutional adoption, enhanced investor awareness, and alignment with global regulatory trends. ETNs track assets like Bitcoin and Ethereum without direct ownership, offering exchange-traded accessibility but carrying counterparty and volatility risks.