Regulation
|3 min ReadUK set to unban crypto ETNs for retail as firms rush in
Carter Hayes
Senior Analyst
Published
Jan 16, 2026
FCA moves to lift retail ETN ban
The UK’s Financial Conduct Authority is poised to reverse its 2019 prohibition on crypto exchange-traded notes for retail investors. An Aug. 1 notice said the ban will lift on Wednesday, as long as the products trade on an FCA-approved, UK-based investment exchange. ETNs differ from ETFs. They are debt securities tied to crypto and are not backed by underlying assets. The watchdog framed this as a targeted opening, not a free-for-all.
The rule tweak follows consultations with companies, trade bodies, and consumer groups. The FCA also set a listing bar: any ETN aimed at UK retail must be on a Recognised Investment Exchange. The aim is tighter rails with clearer accountability. That is the British way. Order first, innovation second, then scale. Tremendous if it works.
Asset managers sharpen pencils, but launch could lag
With the green light looming, big players are already angling for shelf space. BlackRock is exploring how to offer its iShares Bitcoin exchange-traded product for UK retail trading on or after Oct. 8. Bitwise CEO Hunter Horsley said he is “excited to be able to serve more investors in our home market in Europe at long last.” Ian Taylor, board adviser at CryptoUK, called the UK “an outlier on ETNs” and said the shift should improve consumer protections. He also urged officials to consider lifting the broader retail ban on highly regulated derivatives.
Do not expect instant trading. The Financial Times reported retail access might lag by up to a week. Why? The FCA only began accepting prospectuses on Sept. 23, just two weeks before the switch. The regulator still needs to review filings and send comments. That is standard. It slows the ribbon-cutting. But it should lead to cleaner disclosures and fewer surprises.
ETFs still off-limits as the framework stands
Despite the ETN thaw, the FCA made one red-line clear. It is not lifting the retail ban on crypto ETFs or derivatives. In its August notice, the watchdog said ETFs sold to UK retail investors cannot invest directly into crypto under the current fund rules. “This framework would need to be updated before retail investors could access cryptoasset ETFs,” the FCA said. Translation: the door opens a crack for ETNs, but ETFs stay shut until London rewrites the rulebook.
That split stance contrasts with the United States, where spot crypto ETFs have traded since January 2024. Even there, timing has its own hiccups. The US Securities and Exchange Commission is operating with restrictions after lawmakers missed a funding deadline on Oct. 1, limiting its ability to review new crypto ETFs. Different systems, similar headaches.
For UK investors, the message is simple. ETNs are coming back for retail, under stricter venues and paperwork. ETFs are not. Asset managers are lining up products, and the FCA will comb the fine print. It is a step toward mainstream access, with the regulator keeping a tight grip on the wheel.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.