Britain’s financial regulator announced on Monday that it will not block requests from recognised investment exchanges to launch UK-listed cryptoasset-backed exchange-traded notes (ETNs). These products will be exclusively available to professional investors, such as authorised investment firms and credit institutions operating in financial markets. The Financial Conduct Authority emphasized the need for exchanges to ensure orderly trading and proper protection for investors, with crypto ETNs meeting all requirements for UK listings.
The FCA highlighted that professional investors now have access to greater insight and data from a longer period of trading history to assess whether crypto ETNs align with their risk appetite. Despite this, the regulator maintained that crypto ETNs and derivatives are not suitable for retail consumers due to the potential harm they pose. The ban on offering these products to retail consumers will remain in place.
In a cautionary statement, the FCA reminded individuals that investing in cryptoassets carries high risks and they are largely unregulated. The regulator emphasized that those who choose to invest should be prepared to potentially lose all their invested funds. This stance underscores the FCA’s commitment to safeguarding retail investors from the inherent risks associated with cryptoassets.
The decision by the UK financial watchdog regarding crypto exchange-traded notes reflects a measured approach towards balancing innovation and investor protection in the rapidly evolving cryptocurrency landscape.
