UK retail investors will soon be able to buy cryptocurrency exchange-traded notes (ETNs) after the Financial Conduct Authority confirmed it will lift its ban on 8 October 2025.
The regulator has prohibited the sale of crypto ETNs and similar products to individuals since January 2021, citing concerns over volatility and consumer harm. But it now says the market has matured, and that new safeguards will reduce the risk of products being missold.
“Since we restricted retail access to crypto ETNs, the market has evolved, and products have become more mainstream and better understood,” said David Geale, executive director of payments and digital finance at the FCA. “In light of this, we’re providing consumers with more choice, while ensuring there are protections in place.”
The move follows the FCA’s crypto regulation roadmap announced last year and is being described by some as a turning point for digital assets in the UK. “This decision marks a pivotal moment in the broader integration of digital assets into the financial system,” said Dovile Silenskyte, director of digital assets research at WisdomTree.
ETF vs ETN – what’s the difference?
Exchange-traded funds (ETFs) and exchange-traded notes (ETNs) sound similar but are very different in structure.
- ETF: A fund that owns the underlying assets, such as shares or commodities. Investors hold a slice of that portfolio, and returns depend on how those assets perform.
- ETN: A debt instrument issued by a bank or financial institution. It doesn’t hold the underlying assets but promises to pay the return of the index or asset it tracks. This means investors face counterparty risk: if the issuer fails, they may lose money even if the asset has performed well.
While ETFs are generally considered safer because they are backed by real holdings, ETNs often track harder-to-access markets, such as cryptocurrencies.
What does this mean for crypto investors?
Crypto ETNs are typically backed by holdings of Bitcoin or other tokens and trade on exchanges like shares. They allow investors to gain exposure to crypto without needing a wallet or an account on a specialist platform. Many can also be held in a stocks and shares ISA, which makes them more tax-efficient than buying crypto directly.
However, ETNs come with specific risks, including the reliance on the issuer’s creditworthiness. They also fall outside the Financial Services Compensation Scheme. The FCA’s Consumer Duty rules will apply to ensure they are not mis-sold, but investors are still being urged to understand the risks before buying.
No Bitcoin ETFs in the UK
Although the FCA is opening the door to crypto ETNs, it has no plans to lift its ban on spot Bitcoin ETFs. In the US, Bitcoin ETFs have attracted billions in assets, UK investors will remain limited to ETNs and other structured products if they want regulated crypto exposure.
That leaves retail investors with more options than before, but still not the full suite of products available in other markets.
