UK Regulator FCA to Lift Ban on Crypto ETNs for Retail Investors

UK fiscal regulator the Financial Conduct Authority (FCA) said it volition let consumers entree to crypto speech traded notes (cETNs), arsenic the watchdog aims astatine increasing integer assets successful Britain.

The determination means cETNs could beryllium sold to idiosyncratic consumers rather than conscionable nonrecreational investors successful the UK, provided these are traded connected an FCA-approved concern speech (a Recognized Investment Exchange oregon RIE), according to an FCA property merchandise connected Friday.

FCA pointed retired that akin products are already disposable successful different countries. The FCA’s prohibition connected retail entree to cryptoasset derivatives volition stay successful place, portion the regulator continues to show marketplace developments and see its attack to high-risk investments, the merchandise said.

As regulatory regimes are enactment successful spot astir the world, the UK is feeling the request to compete, arsenic evidenced by UK authorities consultations connected crypto rules and caller comments from the Chancellor of the Exchequer Rachel Reeves.

“This consultation demonstrates our committedness to supporting the maturation and competitiveness of the UK’s crypto industry,” said David Geale, enforcement manager of payments and integer assets astatine the FCA.

“We privation to rebalance our attack to hazard and lifting the prohibition would let radical to marque the prime connected whether specified a high-risk concern is close for them fixed they could suffer each their money,” Geale said successful a statement.

The UK’s existing fiscal promotion rules would use truthful consumers get accusation connected the risks and would not beryllium offered inappropriate incentives to invest, successful the aforesaid mode arsenic if they bought cryptoassets directly, the FCA said.

"This improvement is afloat aligned with the UK's ambition to presumption itself arsenic a blase jurisdiction successful the crypto space," said Diego Ballon Ossio, Partner astatine Clifford Chance via email.

"It volition not lone unlock vulnerability to crypto assets for retail investors but stands arsenic awesome that the UK is unfastened to crypto. More enactment is needed connected the Prudential Treatment of these assets but we are surely heading successful the close direction," helium said.