FCA Approves Retail Crypto ETN Purchases in UK

The United Kingdom’s financial regulatory landscape is poised for a significant evolution as the Financial Conduct Authority (FCA) has announced a landmark policy shift, permitting retail investors to purchase crypto Exchange Traded Notes (cETNs). This strategic decision, slated to take effect in October 2025, represents a crucial step in expanding regulated access to digital asset markets within the UK, aligning the nation with a growing trend among global financial centers.

• The Financial Conduct Authority (FCA) will permit retail investors to purchase crypto Exchange Traded Notes (cETNs).
• This new policy is scheduled to take effect in October 2025.
• Eligible cETNs must be listed on an FCA-approved Recognized Investment Exchange (RIE).
• cETNs will not be covered by the Financial Services Compensation Scheme (FSCS).
• The prohibition on retail access to cryptoasset derivatives remains in force.
• The decision follows the FCA’s June 2025 consultation on lifting the retail access ban.

Revised Regulatory Framework and Investor Safeguards

Under the revised framework, cETNs made available to individual investors must be listed on a Recognized Investment Exchange (RIE) approved by the FCA. This requirement ensures that these financial products adhere to established exchange standards and oversight. Furthermore, stringent financial promotion rules will apply to these products, designed to ensure that consumers receive adequate, transparent information and are not misled by marketing materials, fostering informed investment decisions.

However, a critical caveat for prospective investors is that cETNs will not be covered by the Financial Services Compensation Scheme (FSCS). This absence of FSCS protection underscores the necessity for thorough due diligence and comprehensive risk assessment prior to any investment. David Geale, Director of Payments and Digital Finance at the FCA, articulated the rationale behind this policy adjustment, noting that it reflects the maturing digital asset market. “Products have become more mainstream and better understood,” Geale stated, emphasizing the aim to offer consumers greater choice while safeguarding against unsuitable offerings.

Strategic Context and Future Outlook

This development follows the FCA’s June 2025 consultation on lifting the retail access ban, demonstrating a methodical and consultative approach to integrating digital assets into the mainstream financial system. The policy is also consistent with the UK’s broader regulatory agenda, which includes its comprehensive crypto roadmap and ongoing proposals for stablecoin regulation. While the new policy significantly broadens investment avenues for retail participants, the FCA has affirmed that the prohibition on retail access to more complex cryptoasset derivatives, such as perpetual contracts or leveraged tokens, will remain in force. This measured and cautious approach positions the UK alongside other major economies that are carefully integrating digital assets into their regulated financial systems. This progressive yet prudent strategy potentially opens new opportunities for both retail investors seeking regulated exposure to digital assets and compliant crypto issuers within the country, fostering innovation within a controlled environment.