FCA crypto U-turn – everything retail investors need to know
After banning crypto Exchange-Traded Notes (ETNs) for retail customers in January 2021, the Financial Conduct Authority (FCA) reversed its position in October 2025, meaning retail investors can once again purchase exchange-listed crypto instruments, such as ETNs.
According to FCA research, conducted in conjunction with YouGov, 91 per cent of UK consumers are aware of cryptoassets. Despite strong public interest, the range of options for individuals to buy assets has been limited.
Indeed, according to FCA research, 25 per cent of investors said they would be more likely to invest if cryptocurrencies were more regulated in the UK.
The FCA cut off retail investors’ access to crypto products in 2021, deeming these investments too high-risk.
Sheldon Mills, then interim Executive Director of Strategy & Competition at the FCA said in 2020: “Significant price volatility, combined with the inherent difficulties of valuing cryptoassets reliably, places retail consumers at a high risk of suffering losses from trading crypto-derivatives. We have evidence of this happening on a significant scale. The ban provides an appropriate level of protection.”
However, since 2021, the backdrop has changed significantly and regulators have now started to catch up.
What Are ETPs and ETNs?
An ETP, or an Exchange-Traded Product, is a financial product that tracks the value of an asset, in this case, cryptocurrencies such as Bitcoin or Ethereum. ETPs can be traded on regulated exchanges in the same way as stocks and shares.
An ETN, or an Exchange-Traded Note, is a type of ETP issued by a bank or an official financial institution, designed to mirror and track the price of an asset.
With ETPs and ETNs, retail investors can buy access to the crypto market via a FCA-approved, UK-based investment exchange such as the London Stock Exchange.
Crypto ETNs are not new instruments and have been offered since 2015 in other national exchanges such as Nasdaq Stockholm.
In the UK, professional investors have had access to Crypto ETNs, and with their wide adoption, issuers view this as a positive development.
Why has the FCA changed its view?
One of the main reasons the FCA changed its mind and reversed the ban is the evolution of the crypto market over the past few years.
David Geale, Executive Director of Payments and Digital Finance at the FCA, explained the change: “Since we restricted retail access to cETNs, the market has evolved, and products have become more mainstream and better understood. In light of this, we’re providing consumers with more choice, while ensuring there are protections in place. ”
This shift is also part of a broader government goal to make the UK a competitive home for digital asset innovation.
The London Stock Exchange has already observed growing institutional activity in crypto ETNs, with annual trading volumes rising.
The FCA believes that offering regulated, transparent products is safer than leaving retail investors to unregulated offshore exchanges. Crypto ETN issuers see this as a positive change with more to come
Crypto ETNs have now been placed in a new regulatory category called Restricted Mass Market Investments (RMMI), which allows retail access but under tight rules designed to protect inexperienced investors.
Some of the key protections include prominent, clear risk warnings, a ban on incentives, a 24-hour cooling-off period for new investors, and tests designed to ensure consumers understand the risks involved.
Importantly, crypto ETNs are not covered by the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service (FOS).
Why should investors choose ETNs?
For many investors, the main appeal of crypto ETNs is simplicity. Instead of setting up a digital wallet, managing private keys, or using a crypto exchange, you can gain exposure to crypto prices through a familiar investment platform, much like buying shares or funds.
This also reduces some of the practical risks that come with holding crypto directly. Losing access to a wallet or falling victim to an exchange failure has been a real concern in the past. With ETNs, those operational responsibilities sit with regulated providers rather than the individual investor.
Another potential advantage is how these products may fit into existing investment accounts. Some platforms are exploring whether crypto ETNs could be held within pensions such as SIPPs, although their eligibility for ISAs remains limited under current HMRC rules.
That said, while ETNs can make access easier, they don’t remove the underlying risks of crypto itself. Prices can still be highly volatile, and investors could lose a significant portion, or all, of their money.
The Financial Conduct Authority has been clear on this point: although access is expanding, crypto remains a high-risk investment. Anyone considering it should take the time to understand how these products work and seek professional advice before investing.