Retail investors in the UK will soon be able to invest in crypto exchange traded notes (cETNs), following a major regulatory shift by the Financial Conduct Authority (FCA). This move marks a significant milestone in the UK’s approach to cryptoasset regulation, providing new opportunities for individual investors while maintaining strict oversight.
FCA Opens the Door to Crypto ETNs on Regulated UK Exchanges
Under the new rules, cETNs will only be available on FCA-approved Recognised Investment Exchanges (RIEs), meaning these products must be traded on UK-based, regulated platforms. This ensures that any crypto ETNs offered to retail investors are subject to the same consumer protections and financial promotion rules as traditional financial products.
David Geale, the FCA’s executive director of payments and digital finance, commented that the crypto market has matured significantly. “Crypto products have become more mainstream and better understood, which allows us to expand investor choice while maintaining necessary safeguards,” he said.
Key Protections – But No FSCS Coverage
While the FCA’s updated rules aim to enhance investor protection through regulated trading environments and clear financial promotions, it’s important for investors to note that crypto ETNs will not be covered by the Financial Services Compensation Scheme (FSCS). This means that if something goes wrong—such as the failure of an exchange—investors won’t be eligible for government-backed compensation.
The FCA is also requiring that any firms offering these products must comply with its Consumer Duty regulations, which are designed to ensure that financial services act in customers’ best interests.
This development is part of the FCA’s broader strategy to build a comprehensive regulatory framework for digital assets in the UK. Although access to cryptoasset derivatives remains restricted, the regulator continues to explore future rules for stablecoins and high-risk investment products. The goal is to strike a balance between encouraging innovation and ensuring investor safety.
As the UK continues to solidify its position as a responsible crypto hub, this latest move opens the door for more mainstream access to digital assets—while keeping regulatory safeguards firmly in place.
