Financial Regulatory Body Expands Cryptocurrency Exchange-Traded Notes to Retail Investors
Starting from October 2025, the UK Financial Conduct Authority (FCA) will allow retail investors to access and trade FCA-authorised crypto exchange-traded notes (cETNs) on UK-based investment exchanges (RIEs). This regulatory change marks a significant step towards regulated crypto investing in the UK.
The FCA's decision is part of its broader initiative to foster a safer, more stable, and innovative cryptoasset market. In order to protect retail investors, the FCA has introduced a new framework that classifies cETNs as Restricted Mass Market Investments (RMMIs). This framework includes several key requirements, such as clear risk warnings in marketing and distribution, appropriateness testing for retail clients, compliance with the FCA's Consumer Duty, and distribution restricted to the identified target market.
The Consumer Duty will apply to firms offering FCA Crypto ETNs to retail investors, ensuring that they act to deliver good outcomes, avoid foreseeable harm, and identify a target market for their products. Financial promotion rules will also apply, ensuring that consumers receive the right information and are not offered inappropriate incentives to invest.
However, it is important to note that the FCA's regulatory framework for crypto does not currently cover FCA Crypto ETNs under the Financial Services Compensation Scheme (FSCS). This means that consumers will not be covered in the event of a firm's insolvency.
The FCA's regulatory approach to high-risk investments, such as those related to crypto, may evolve based on market developments. The FCA's crypto roadmap includes proposals on stablecoins and other aspects of the crypto regime.
The move to allow retail access to FCA Crypto ETNs is a step towards a more regulated crypto investing environment in the UK. The FCA's executive director of payments and digital finance, David Geale, has stated that the market has evolved and these products have become more mainstream and better understood. However, consumers should understand the risks before deciding to invest in FCA Crypto ETNs.
The FCA's ban on retail access to cryptoasset derivatives remains in place. The FCA is providing consumers with more choice by allowing access to these cETNs, while ensuring there are protections in place. The UK's move to allow retail access to FCA Crypto ETNs marks a step towards regulated crypto investing, under the FCA's evolving digital finance roadmap.
- Investors interested in will find new opportunities starting from October 2025 as the FCA allows retail trading of FCA-authorised crypto exchange-traded notes (cETNs) on UK-based investment exchanges.
- To protect retail investors, the FCA's new framework classifies these cETNs as Restricted Mass Market Investments (RMMIs), incorporating requirements like clear risk warnings, appropriateness testing, and compliance with the FCA's Consumer Duty.
