The Financial Conduct Authority will lift its ban on retail
access to cryptoasset-backed exchange traded notes on 8 October this year. This
follows a consultation that began in June.
Retail investors will be able to access cETNs if they are
listed on FCA-recognised UK investment exchanges. These are referred to as
Recognised Investment Exchanges.
Firms Must Avoid Misleading Investment Incentives
“While these products remain subject to the FCA’s mass
market restriction, today’s move lays important groundwork for broader retail
engagement under a regulatory framework,” Dovile Silenskyte, Director, Digital
Assets Research, WisdomTree, commented.
The FCA said firms must follow financial promotion rules.
These rules are designed to ensure that retail clients receive clear and
accurate information. Incentives to invest must not be misleading or
inappropriate.
In January 2021, the FCA implemented a ban on the sale,
marketing, and distribution of derivatives and exchange traded notes
referencing unregulated cryptoassets to retail clients.
“Since we restricted retail access to cETNs, the market has
evolved, and products have become more mainstream and better understood,” David
Geale, Executive Director of Payments and Digital Finance at the FCA, said.
“In light of this, we’re providing consumers with more
choice, while ensuring there are protections in place. This should mean people
get the information they need to assess whether the level of risk is right for
them,” Geale added.
You may find it interesting at FinanceMagnates.com: FCA
Applies New Tech to Handle 3,200% More Financial Promotions Reviewed in Three
Years
🇬🇧 FCA to allow retail access to crypto ETNs starting Oct 8Retail investors in the UK will soon be able to trade crypto exchange-traded notes (cETNs) — but only on FCA-approved exchanges.⚠️ No FSCS coverage📋 Financial promotion rules apply✅ More access, with consumer… pic.twitter.com/8jPM0eRaGE
— CryptoPotato Official (@Crypto_Potato) August 1, 2025
cETNs Lack FSCS Protection Warning
Firms must also comply with the Consumer Duty. This sets out
how firms should act to deliver good outcomes for consumers. Despite this,
cETNs will not be protected under the Financial Services Compensation Scheme. The FCA has warned that consumers should understand the risks before
investing.
The FCA stated that the ban on cryptoasset derivatives for
retail investors will stay in place. It said it will continue to review the
crypto market and consider its approach to high-risk investments.
This article was written by Tareq Sikder at www.financemagnates.com.
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