UK to Allow Retail Access to Crypto ETNs Starting October 2025

The UK Financial Conduct Authority (FCA) has announced that retail investors will gain access to crypto-backed exchange-traded notes (ETNs) starting October 8, 2025, marking a shift in the country’s approach to digital asset regulation. This change enables investors to trade ETNs that track the performance of cryptocurrencies like Bitcoin, but only through FCA-approved exchanges such as the London Stock Exchange. The FCA’s decision, outlined in a June 2025 consultation, reverses its 2021 ban on crypto ETNs and derivatives for retail clients, acknowledging the growing acceptance of these products in global markets [1].

Retail investors will not receive protection from the Financial Services Compensation Scheme (FSCS), which insures up to £85,000 in the event of a firm’s failure. A 2023 FSCS report found that 70% of crypto investors lost money due to platform collapses, highlighting the high-risk nature of the sector. The FCA emphasized that the Consumer Duty framework will apply, requiring firms to provide clear risk disclosures and avoid misleading incentives [2].

While the regulator has reopened access to crypto ETNs, it has maintained its ban on crypto derivatives, citing concerns over their volatility and the potential for retail losses. This decision is informed by a 2020 FCA study that linked the complexity of derivatives to significant investor losses. The FCA’s cautious approach underscores its commitment to investor protection amid calls from industry stakeholders for broader market access [3].

The FCA has also stated it will continue to monitor the crypto market and refine its regulatory approach, including recent proposals on stablecoins. David Geale, the FCA’s executive director of payments and digital finance, noted that the evolving market justifies this step, which balances innovation with necessary safeguards [4].

This policy change positions the UK as a hub for regulated crypto innovation, offering investors a potentially more transparent and structured way to gain exposure to digital assets. However, investors are urged to conduct thorough research and understand the inherent risks, particularly the absence of FSCS coverage and the volatility of the underlying crypto markets [5].

Source:

[1] title1.............................(https://cryptobriefing.com/fca-maintains-retail-crypto-derivatives-ban/)

[2] title2.............................(https://coinpedia.org/news/uks-fca-allows-retail-access-to-crypto-etns-but-with-a-warning-tag/)

[3] title3.............................(https://cryptodnes.bg/en/uks-fca-greenlights-crypto-etns-for-retail-investors-starting-october/)

[4] title4.............................(https://www.bitcoininsider.org/article/281268/fca-clears-crypto-etns-uk-retail-investors-trading-resumes-october-2025)

[5] title5.............................(https://www.financemagnates.com/cryptocurrency/fca-to-allow-retail-investors-to-gain-access-to-crypto-etns-starting-october/)