Crypto ETNs: FCA Greenlights Retail Comeback in UK from October
The UK’s financial watchdog is flipping the script. From October 8, Crypto ETNs will once again be available to retail investors in the United Kingdom, marking a significant shift in the country’s cautious approach toward digital assets.
This green light from the Financial Conduct Authority (FCA) follows a public consultation in June. It’s a nod to a maturing crypto landscape that now, according to the regulator, boasts stronger investor understanding and product safeguards.
But it’s not an all-access pass.
Retail investors will be allowed to trade cryptoasset-backed exchange-traded notes (cETNs) only if they’re listed on FCA-recognised UK investment exchanges.
Crypto derivatives? Still off the table for individual traders. And there’s another catch—cETNs won’t fall under the safety net of the Financial Services Compensation Scheme (FSCS). So, tread carefully.
Back in January 2021, the FCA had clamped down hard, citing high volatility and widespread investor confusion. But now, they believe times have changed.
Since we restricted retail access to cETNs, the market has evolved, and products have become more mainstream and better understood.
We’re providing consumers with more choice, while ensuring protections are in place,” said David Geale, Executive Director of Payments and Digital Finance at the FCA.
Firms planning to offer cETNs must now follow tighter promotional standards. They’re also bound by the FCA’s Consumer Duty regulations, essentially a legal obligation to ensure customers get a fair deal.
Dovile Silenskyte, Director of Digital Assets Research at WisdomTree, praised the move, calling it “important groundwork for broader retail engagement under a regulatory framework,” while still noting that cETNs face mass-market limitations.
The timing of this regulatory shift couldn’t be more politically charged. Crypto exchange giant Coinbase has been vocal, very vocal, about the UK’s sluggish financial reforms. Its latest campaign, titled “Everything is fine”, takes a sharp jab at the UK’s financial establishment using humour and satire.
The video highlights the cracks in the current system, rising living costs, outdated policies, and sluggish reform, compared to the pace of innovation in decentralised finance across the globe.
Brian Armstrong, CEO of Coinbase, didn’t hold back: “We weren’t allowed to run this ad on TV in the UK, but that’s fine, we can just share it online. We’re using humor to make a very important point: the current financial system simply doesn’t work for most people. It needs to be updated.”
His message sparked conversations and controversy. Some applauded the honesty; others warned it oversimplified the risks of diving into crypto too casually.
The FCA’s decision is a calculated step forward. It offers more freedom to retail investors without flinging the doors wide open. The move also sends a signal, one that suggests the UK is keen to balance innovation with responsibility.
Still, the regulator stands firm on its concerns. Volatility remains a major issue. Education and awareness are more vital than ever. And despite the loosening of the leash, crypto in the UK will remain under tight surveillance.
For now, the message is clear: the UK is warming up to regulated crypto, but on its own terms.
