The United Kingdom’s securities watchdog Financial Conduct Authority (FCA) has officially lifted its ban on crypto ETNs, allowing retail investors to buy these digital asset instruments as per a press release by the regulatory authority.
“Since we restricted retail access to cETNs, the market has evolved, and products have become more mainstream and better understood. In light of this, we’re providing consumers with more choice, while ensuring there are protections in place. This should mean people get the information they need to assess whether the level of risk is right for them,” said David Geale, who is FCA’s executive director of payments and digital finance.
U.K.’s FCA gives guidelines for crypto investors and exchanges
However, the FCA does say in its statement that exchanges who do offer this form of investment have to be FCA-approved and U.K.-based. The traditional rules about financial promotion will apply to these notes, ensuring that buyers receive all the appropriate information they need before investing.
The rules also prevent consumers from being offered undue incentives that tempt them to buy the product. Consumers are expected to be informed of the possible risks associated with such investments before they partake in the market.
The FCA is still developing a regulatory framework to govern cryptocurrency. While this is a relaxation on cryptocurrency regulation, it still follows a crackdown launched by ministers in the U.K. on crypto holders and traders who were not paying taxes on profits earned from investments.