Financial Regulatory Authority Plans to Provide Retail Investors with Access to Cryptocurrency Exchange-Traded Notes
UK Financial Conduct Authority Lifts Ban on Retail Access to Crypto Exchange-Traded Notes
Starting October 8, 2025, retail investors in the United Kingdom will gain regulated access to crypto exchange-traded notes (cETNs) on FCA-recognised exchanges. This regulatory change marks a significant policy shift as the Financial Conduct Authority (FCA) seeks to balance consumer protection with growing demand for regulated crypto investment products.
cETNs are debt securities issued by financial institutions that are designed to track the performance of cryptocurrencies while deducting fees and expenses. However, it's important to note that these products will remain outside the UK's Financial Services Compensation Scheme, meaning investors will not have compensation protections in the event of issuer failure.
To ensure transparency and prevent misleading marketing, the FCA has implemented strict financial promotion rules for cETNs. Firms offering these products to retail clients must also comply with the Consumer Duty, ensuring products are targeted appropriately and do not cause foreseeable harm to consumers.
Despite this regulatory update, the crypto market remains volatile, and investors should carefully assess the level of risk before making investment decisions. Crypto derivatives, such as futures and options linked to digital assets, remain banned for retail clients due to their complexity and risk concerns.
The FCA's decision does not include any mention or reference to "Project Crypto" or its relation to the US Securities and Exchange Commission (SEC). Regarding other jurisdictions, the statuses vary globally, with some markets allowing limited access under strict conditions and others maintaining bans or restrictions.
The move aligns the UK with other jurisdictions like the US, Canada, Hong Kong, and several EU member states where similar products are accessible to individual investors. The FCA's Executive Director of Payments and Digital Finance, David Geale, has noted the crypto market's evolution and mainstreaming since the restrictions were first introduced.
Firms offering cETNs will be required to adhere to the Consumer Duty framework, delivering fair and transparent outcomes for clients. This regulatory change reflects the FCA’s assessment that the crypto market and retail investors’ understanding have matured sufficiently to allow broader access with protections in place.
The FCA's latest stance follows a consultation process launched earlier this year. The decision allows retail investors to trade cETNs on recognised investment exchanges (RIEs) approved by the FCA. However, UK retail customers remain unable to directly invest in US spot crypto ETFs or similar offshore products due to existing rules.
Investors are advised to understand the risks before making investment decisions, given the volatility of cryptocurrency markets. The FCA's decision to allow cETNs is part of a larger trend of regulatory reassessment in response to market evolution. The regulatory update signifies a step towards increased accessibility and regulation in the crypto market for retail investors in the UK.
[1] Financial Conduct Authority (FCA) Announces Plans to Lift Restrictions on Retail Access to Crypto Exchange-Traded Notes (cETNs). (2025, August). Retrieved from https://www.fca.org.uk/news/statements/fca-announces-plans-lift-restrictions-retail-access-crypto-exchange-traded-notes-cetns
[2] FCA Consultation Paper on Crypto Exchange-Traded Notes (CP21/27). (2021, July). Retrieved from https://www.fca.org.uk/publications/consultation-papers/fca-cp21-27-consultation-paper-crypto-exchange-traded-notes
[3] FCA Policy Statement on Crypto Exchange-Traded Notes (PS21/23). (2021, September). Retrieved from https://www.fca.org.uk/publications/policy-statements/fca-ps21-23-policy-statement-crypto-exchange-traded-notes
[4] FCA Supervisory Statement on Crypto Exchange-Traded Notes (SS21/2.12). (2021, September). Retrieved from https://www.fca.org.uk/publications/supervision/fca-supervisory-statement-crypto-exchange-traded-notes
[1] With the FCA's regulatory change, UK businesses in the finance and technology sectors now have the opportunity to offer crypto investment products, such as crypto exchange-traded notes (cETNs), to a broader audience starting October 8, 2025.
[2] The decision reflects the FCA's efforts to balance consumer protection and the growing demand for regulated crypto investment products, thereby promoting the mainstreaming of cryptocurrency and digital assets in the UK business landscape.