UK financial authorities to allow sales of cryptocurrency ETNs to retail investors starting in October.

## Access Granted for Retail Investors

The UK's Financial Conduct Authority (FCA) announced that it will lift the ban on the sale of crypto exchange traded notes (cETN) to retail investors starting from October 8. This marks the first time in nearly four years that the prohibition, which had been in place since January 2021, has been removed, allowing regulated firms to provide access to individual consumers.

The ETNs for cryptocurrencies accessible to retail investors require trading on FCA-approved investment exchanges based in the UK. Financial promotion regulations apply, ensuring that consumers are protected from inappropriate investment solicitations and receive appropriate information.

ETNs are debt instruments issued by financial institutions that are linked to the price of Bitcoin, but they do not actually hold the cryptocurrency, and there is credit risk associated with the issuer. On the other hand, ETFs are investment trusts that hold actual Bitcoin, and because the assets are protected by regulated custodians, they offer higher transparency and safety.

David Geale, Executive Director of Payments and Digital Finance at the FCA, explained that "the market has evolved and products have become more mainstream and easier to understand." While providing consumers with more choices, he stated that appropriate protective measures will be ensured.

Companies providing these products are subject to consumer obligations but are excluded from the financial services compensation scheme. Authorities have warned that consumers need to fully understand the risks before making investment decisions.

This measure is part of the establishment of a regulatory framework for virtual currencies, and the FCA has recently also published proposals regarding stablecoins. However, the ban on cryptocurrency derivatives for retail investors will continue, and there is a policy to continue monitoring high-risk investment products.