UK financial watchdog won’t block requests for cryptocurrency exchange-traded notes

11.03.2024

Britain’s financial regulator said on Monday it would not object to requests from recognized investment exchanges to launch exchange-traded bonds backed by crypto-assets registered in the UK.

Such products would only be available to professional investors such as investment firms and credit institutions authorized to operate in financial markets, the Financial Conduct Authority said in a statement.

Exchanges must ensure orderly trading and adequate investor protection, the FCA said, and cryptocurrency exchange-traded notes (ETNs) meet all UK listing requirements.

The FCA said that with greater insight and data from a longer period of trading history, professional investors can now better determine whether cryptocurrency ETNs match their risk appetite.

However, such products, as well as cryptocurrency derivatives, are “ill-suited for retail consumers because of the harm they pose,” the FCA said, adding that the ban on the sale of cryptocurrency ETNs and cryptocurrency derivatives to retail consumers will remain in place.

“The FCA continues to remind people that cryptoassets are highly risky and largely unregulated. Those who invest should be prepared to lose all their money,” the FCA added.