New FCA rule opens crypto ETN market to retail investors, with strict oversight and no compensation scheme protection
Starting October 8, UK retail investors will be allowed to invest in crypto exchange-traded notes (cETNs) under a new rule introduced by the Financial Conduct Authority (FCA). This marks a major shift from the FCA’s previous ban on such products for retail customers, which had been in place since 2021 due to concerns about investor protection.
The FCA now believes the crypto market has matured enough for a limited reintroduction of these investment products—provided they meet regulatory standards. To be eligible, crypto ETNs must be listed on recognized, FCA-approved UK-based exchanges, and must comply with financial promotion rules to prevent misleading marketing or inappropriate sales tactics.
The products will also be subject to the FCA’s Consumer Duty rules, which require financial firms to act in the best interest of clients and avoid causing foreseeable harm. Despite this, the FCA has issued a strong warning: retail investors will not be protected by the Financial Services Compensation Scheme (FSCS) should losses occur.
UK Follows Global Crypto ETF Trend
This move comes as global interest in crypto-related investment vehicles continues to surge. In the United States, a range of cryptocurrency exchange-traded funds (ETFs) have already been made available to the public, accumulating a combined $146.4 billion in net assets, according to SoSoValue data.
The FCA’s decision brings the UK closer in line with other major markets, while still enforcing strict safeguards. It reflects growing confidence in crypto-related financial products, but the regulator insists that investors should proceed with caution.
