UK FCA Proposes Lifting Retail cETN Ban

The UK Financial Conduct Authority (FCA) proposed lifting the ban on crypto exchange-traded notes for retail investors, originally imposed in 2021. This move, announced on June 5, 2025, intends to allow retail investors access to these products on approved exchanges.

The FCA’s proposal marks a significant shift from the 2021 ban, which excluded retail investors from participating in crypto exchange-traded notes (cETNs). David Geale of the FCA stated the move could rebalance risk. As he explained:

“This consultation demonstrates our commitment to supporting the growth and competitiveness of the UK’s crypto industry. We want to rebalance our approach to risk and lifting the ban would allow people to make the choice on whether such a high-risk investment is right for them, given they could lose all their money.” – FCA Press Release

The FCA plans to allow retail investors to trade cETNs referencing cryptocurrencies like Bitcoin and Ethereum. Previously, such products were restricted to professional investors.

The proposal suggests a potential increase in exchange volumes and liquidity for major digital assets. It also requires cETNs to adhere to strict financial promotion rules, enhancing transparency. The FCA emphasizes increased consumer choice and protection with detailed risk disclosures. Institutional adoption might rise as retail investors gain access to regulated crypto products. This aligns with similar developments in the EU and US, where crypto ETPs have expanded retail participation.

Future financial, regulatory, and market outcomes hinge on consultation feedback and regulatory adjustments. Successful implementation could lead to an uptick in retail investment activity. Despite current bans on crypto derivatives for retail, the FCA’s openness to adjustment indicates a potential recalibration of its crypto market approach.