FCA Opens Retail Access To Crypto Exchange Traded Notes (ETNs) From October

The Financial Conduct Authority will allow retail investors to access cryptocurrency exchange traded notes from 8 October 2025, reversing restrictions that have been in place since January 2021 and opening up a market that currently features products from three major issuers.

Under the new rules, crypto ETNs accessible to retail consumers must be traded on an FCA-approved, UK-based recognised investment exchange such as Cboe or the London Stock Exchange. Financial promotion rules will apply to ensure consumers receive appropriate information and are not offered unsuitable incentives to invest.

The move represents a significant shift in the regulator's approach to cryptocurrency products for retail investors, following a consultation launched in June 2025 on proposals to lift the ban. Currently, there are about 30 crypto ETPs listed on the London Stock Exchange, all limited to professional investors, but retail access is expected to dramatically increase trading volumes.

David Geale, Executive Director of Payments and Digital Finance at the FCA, said: "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 should mean people get the information they need to assess whether the level of risk is right for them."

The regulatory change will benefit investors holding existing UK-listed crypto ETNs from three established providers. 21Shares operates four bitcoin and four ether-backed cross-listed products in the UK, offering both USD and GBP denominated versions, including popular Ethereum Staking ETNs that have seen around 57% more trading volume than its Core Ethereum product without a staking yield.

WisdomTree offers Physical Bitcoin (BTCW) and Physical Ethereum (ETHW) ETPs with fees of 35 basis points, whilst Invesco offers two bitcoin-backed products to complete the current market offerings.

All UK-listed crypto ETNs must meet strict criteria: they must be physically backed, non-leveraged and limited to bitcoin or ethereum exposures. This means the products are 100% physically backed by the underlying digital assets, which are kept in cold storage by an institutional-grade custodian.

The Consumer Duty will apply to firms offering these products to retail investors, though there will be no coverage from the Financial Services Compensation Scheme. The regulator emphasised that consumers should ensure they understand the risks before deciding to invest.

Trading activity has been limited since the products launched in May 2024. Since their introduction, crypto ETNs have had a slow start to trading in the UK, generating around $500,000 in total volume with WisdomTree accounting for 59% of the trading volume and 21Shares 41%. The Invesco products have witnessed zero trading volume so far.

As 21Shares noted, opening these products to retail investors would be a "game changer", particularly given that spot Bitcoin ETFs in the US saw $2.5 billion worth of trading volume on Friday alone compared to the UK's modest volumes.

The FCA originally banned the sale, marketing and distribution of derivatives and ETNs that reference unregulated transferable cryptoassets to retail clients in January 2021. In March 2024, the authority announced it would not object to requests from recognised investment exchanges to create UK listed market segments for cryptoasset-backed exchange traded notes for professional investors.

The latest development forms part of the FCA's broader efforts to establish a comprehensive regulatory framework for cryptocurrency markets. The authority has outlined its crypto roadmap and recently published proposals on stablecoins alongside other aspects of the regulatory regime.

However, the FCA's ban on retail access to cryptoasset derivatives will remain in place. The regulator stated it will continue monitoring market developments and considering its approach to high-risk investments.

21Shares expects to list more crypto products in London, including a product that blends gold and bitcoin, as well as basket and coin products, suggesting the market could expand significantly once retail access becomes available.

The change comes as cryptocurrency markets have experienced significant volatility and growth, with Bitcoin reaching new all-time highs above $120,000 earlier this year. The decision to allow retail access to crypto ETNs reflects the regulator's view that the market has matured and products have become better understood since the original restrictions were implemented.

Recognised investment exchanges must meet regulatory standards under recognition orders granted by the FCA, with requirements including equivalent protection for investors. The authority has powers under the Financial Services and Markets Act 2000 to consider applications from UK entities for recognition as UK recognised bodies.

The regulatory change is detailed in Handbook Notice 132, which sets out the specific requirements and protections that will apply when the new rules take effect in October.