Crypto ETNs are approved for UK retail investors
The FCA has approved the sale of crypto ETNs to retail investors from October. What is a crypto ETN, and what does this mean for investors?


UK-based retail investors will be able to buy cryptocurrency exchange-traded notes (crypto ETNs) – with safeguards in place to ensure that products aren’t missold - following new rules from the Financial Conduct Authority (FCA) which come into play later this year.
Cryptocurrencies are popular among UK retail investors. Some of the top stocks on Interactive Investor’s platform over recent months have included Tesla and MicroStrategy, both of which hold Bitcoin on their balance sheet.
Around 12% of British adults now own some form of cryptocurrency, up from around 4% in 2021.
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But since January 2021, the FCA has banned the sale of crypto products – including crypto ETNs – to retail (AKA ‘DIY’ or individual) investors.
That ban will be lifted on 8 October.
“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 FCA announced a crypto regulation roadmap in November last year, and the lifting of the retail ban on crypto ETNs is one of its latest decisions. It is also potentially one of the ones with the greatest implications for everyday investors.
The 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.
Similar products have been hugely popular in other countries, but will UK investors buy the hype?
What is a crypto ETN?
ETN stands for exchange-traded note. This is a type of financial instrument that trades on a stock exchange and gives investors exposure to cryptocurrency prices and their movements.
An ETN is a form of exchange-traded product (ETP). The best-known form of ETP is an exchange-traded fund (ETF), which is a fund that trades in real-time on a stock exchange.
Some investors might be familiar with exchange-traded commodities (ETCs). These act like ETFs but they track the price of an individual commodity; they can be used, for example, to invest in gold.
ETNs are similar to ETFs and ETCs but they typically track a more niche product or index, without requiring investors to directly hold the underlying securities.
Unlike a ‘physical’ ETF, ETNs don’t give investors direct ownership of the underlying asset. The ETN allows the issuer flexibility to mimic the returns of the security however they see fit.
While some investors won’t want to hold cryptocurrency through an ETN – there are risks associated with the structure, such as counterparty risk – they offer some advantages over buying cryptocurrency directly.
Unlike cryptocurrencies themselves, most ETNs can be bought and held in a stocks and shares ISA, meaning that they are more tax-efficient.
Additionally, some investors may be concerned about the security risks involved in setting up an account with a specialist cryptocurrency exchange. Coinbase, for example, was subject to a major security attack earlier this year.
“By accessing crypto through ETPs, retail investors can now engage with crypto in a safer, more transparent environment, in doing so reducing the risks of unregulated platforms,” said Silenskyte.
Should you buy a crypto ETN?
While investors will soon be able to buy crypto ETNs, it is another question entirely whether or not they should.
Cryptocurrencies are inherently volatile, making them a very high-risk investment. They are generally unsuitable for beginner investors, and any decision to invest in them should be made in consultation with a financial adviser.
ETNs in particular could expose investors to extra risks. While the Consumer Duty will apply to firms selling crypto ETNs to prevent their mis-sale, crypto ETNs won’t be subject to coverage from the Financial Services Compensation Scheme.
It is important, then, that investors understand the risks involved thoroughly before deciding to buy a crypto ETN.
But advocates think cryptocurrencies are an increasingly important part of the investing landscape and that the move will help investors understand the role they can play.
“These products make it easier for investors to evaluate and manage crypto within the context of their broader portfolios, in turn supporting more informed decision-making in pursuit of long-term investment goals,” said Silenskyte.
“While these products remain subject to the FCA’s mass market restriction, today’s move lays important groundwork for broader retail engagement under a regulatory framework."
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Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.
Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.
Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.
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