UK regulator lifts ban on crypto ETNs for retail investors

The United Kingdom’s Financial Conduct Authority (FCA) has lifted the prohibition connected retail entree to cryptocurrency exchange-traded notes (cETNs).

Companies successful the UK volition soon beryllium capable to connection retail consumers cETNs, with regulatory changes effectual from Oct. 8, 2025, according to an authoritative FCA announcement connected Friday.

The caller improvement successful the UK’s regulatory attack connected crypto comes years aft the FCA banned crypto ETNs successful January 2021, citing the utmost volatility of crypto assets and a “lack of morganatic concern need” for retail consumers.

“Since we restricted retail entree to cETNs, the marketplace has evolved, and products person go much mainstream and amended understood,” David Geale, FCA enforcement manager of payments and integer finance, said successful the announcement.

What are crypto ETNs?

Unlike cryptocurrency exchange-traded funds (ETFs), which way the terms of underlying assets similar Bitcoin (BTC) successful custody, crypto ETNs are not backed by immoderate underlying assets and correspond indebtedness securities.

“Instead of equity successful the fund, each traded enactment of an ETN represents an work from a ineligible entity holding the underlying plus arsenic collateral,” according to the ETN statement by the Austrian crypto trading level Bitpanda.

Differences betwixt ETFs, ETCs [exchange-traded commodities] and ETNs. Source: Bitpanda

By investing done an ETN tracking crypto, investors tin get vulnerability to carnal crypto assets via their regular brokers oregon banks.

ETNs are associated with risks similar constricted power implicit their assets, which underscores the value of purchasing ETNs from reputable institutions to guarantee safety, Bitpanda said.

Crypto derivatives inactive banned

While allowing crypto ETNs, the UK FCA is yet to marque a determination connected whether to let retail investors to entree crypto derivatives, which the authorization banned alongside ETNs successful 2021.

“The FCA volition proceed to show marketplace developments and see its attack to high-risk investments,” the regulator stated.

Related: ‘Everything is fine’: Coinbase mocks UK fiscal strategy successful caller video

Crypto derivatives, oregon products specified arsenic crypto futures, options and perpetual contracts, person shown resilience successful the 2nd 4th of 2025, with volumes netting $20.2 trillion, according to the crypto analytics level TokenInsight.

In contrast, centralized exchanges’ (CEXs) volumes plummeted by 22%, showing a large opposition to cryptocurrency ETFs.

US allows in-kind for crypto ETFs: No interaction connected retail

Cryptocurrency ETFs person seen singular maturation since their historic motorboat successful the US successful 2024, with issuers similar BlackRock posting a 370% surge successful inflows successful Q2 2025 and crypto funds breaking aggregate records.

On Tuesday, the US SEC delivered different important determination connected crypto ETFs, officially authorizing issuers to proceed with in-kind creations and redemptions oregon to speech ETF shares for the underlying crypto assets.

Although the determination is mostly seen arsenic large quality for the crypto industry, ETF analysts similar Eric Balchunas accidental that the lawsuit volition apt person small to nary interaction connected retail investors.

“It’s not a immense interaction to retail but much of a plumbing fix. It conscionable makes the pipes a small better,” Balchunas said successful an X station connected Tuesday. The biggest takeaway from the milestones is that the SEC is acceptable to dainty crypto similar a legit plus class, helium added.

Magazine: Crypto traders ‘fool themselves’ with terms predictions: Peter Brandt