The Financial Conduct Authority (FCA) has reiterated its rules against selling cryptocurrency products such as exchange traded funds (ETFs) to retail investors.
The UK financial services regulator told Citywire earlier this week that such products remain “ill-suited” for retail investors, despite rising investor interest.
In doing so, the FCA is sticking to the line it first drew in March, when it confirmed it would not allow retail investors to trade in cryptoasset-backed Exchange Traded Notes (cETNs).
At the same time, the regulator approved the launch of cETNs for use by accredited professional investors.
“The FCA is collaborating with government, international partners and industry to develop the UK’s cryptoasset regulatory regime and lead international standards in this space,” the regulator said in update on its website at the time.
The FCA currently considers applications for listing cETNs on a case-by-case basis , and may grant approval so long as such products would be available only to professional investors including investment firms and credit institutions.
The FCA told Citywire on Monday: “We believe crypto-backed exchange-traded notes (cETNs) are ill-suited for retail consumers given the potential for significant harm.
“We continue to collaborate with government, international partners and industry to develop the UK’s cryptoasset regulatory regime and lead international standards in this space.”
The FCA has been tasked with further developing the UK’s cryptoasset regulatory regime and industry standards, with the government previously signalling its desire to make the country a global hub for crypto.
In June 2023 FCA data found 9% of adults in the UK own crypto assets, up from 4.4% in 2021. In addition 28% of those who do not hold crypto said hey would be more likely to trade in it if the market was regulated.
In the UK, only firms on the FCA’s Cryptoasset Firms register are allowed to offer crypto investing and trading services to UK customers.
The 44 firms on the list (as 11/9/24), as well as information regarding their services, can be viewed here.
Robin has more than six years of experience as a financial journalist, most of which were spent at Citywire, and covers the latest developments in the investing, trading and currency transfer space. Outside of work, he enjoys reading literature and philosophy and playing the piano.
You can contact Robin at robin@goodmoneyguide.com
