Retail investors in the UK will soon gain access to crypto exchange traded notes (cETNs), as the Financial Conduct Authority (FCA) announces a significant regulatory shift. These cETNs must be traded on a UK-based, FCA-approved Recognised Investment Exchange (RIE), ensuring consumer protections and compliance with financial promotion rules.

According to David Geale, executive director of payments and digital finance at the FCA, the decision reflects the evolving crypto landscape. He stated that crypto products have become more mainstream and better understood, allowing for expanded investor choice while maintaining safeguards. Firms offering these products must follow the FCA’s Consumer Duty regulations, but investors won’t be protected by the Financial Services Compensation Scheme (FSCS).

This move is part of the FCA’s broader effort to build a crypto regulatory framework. While access to cryptoasset derivatives remains restricted, the FCA continues to explore proposals on stablecoins and high-risk investments, aiming to strike a balance between innovation and investor safety.

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