Crypto ETN Ban Lifted, Yet Investors Face a One-Week Wait to Include Them in Portfolios

Published: Wednesday, October 15, 2025 at 3:02 am

Crypto ETN Ban Lifted, But Retail Investors Face Delay

The Financial Conduct Authority (FCA) has lifted its ban on crypto exchange-traded notes (ETNs), opening the door for retail investors to potentially include cryptocurrencies in their portfolios. These products, similar to ETFs, are listed on stock exchanges and pool investor money to track the price of a digital asset without direct ownership. However, despite the ban being lifted on Wednesday, retail investors will have to wait until at least October 13th to access these ETNs.

The delay stems from the requirement for ETN providers to submit their prospectuses for FCA approval. The FCA only began accepting draft prospectuses on September 25th, leaving a limited timeframe for review. This has raised concerns, particularly as similar products are already available to retail investors in Europe and the US. Some industry experts have criticized the timing, citing insufficient time for discussions with the London Stock Exchange (LSE) regarding a potential new segment for these products.

The FCA, however, maintains that the delay is due to waiting for the LSE to open a segment for these products. The FCA emphasizes its commitment to developing a sustainable and competitive crypto sector, aiming to rebalance risk and empower individuals to make informed investment choices. The FCA also stated that the lifting of the ban allows people to make the choice on whether such a high-risk investment is right for them.

The availability of these ETNs is also contingent on authorized retail brokers, with some brokers already committed to offering the products, while others have delayed timelines. These products are classified as Restricted Mass Market Investments, requiring providers to complete a significant compliance process. Furthermore, the products are structured as ETNs traded on a recognised investment exchange, which retail customers should be aware embeds counterparty/issuer risk rather than true asset ownership.

The lifting of the ban also allows for tax-advantaged exposure to cryptoassets. Crypto ETNs will be eligible for inclusion in stocks and shares ISAs, offering tax-free benefits. However, from April next year, they will be reclassified as qualifying investments for innovative finance ISAs, making them ineligible for stocks and shares ISAs.

BNN's Perspective:

While the lifting of the ban is a positive step towards providing retail investors with access to crypto investments, the delay raises questions about the FCA's preparedness. The regulatory process should be efficient to avoid hindering market development. The FCA should strive to strike a balance between investor protection and fostering innovation in the crypto sector.

Keywords: crypto ETNs, FCA, ban lifted, retail investors, investment, digital assets, London Stock Exchange, prospectuses, tax-advantaged, ISAs, crypto market, financial regulation

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