Industry Updates

Crypto ETNs to list on London Stock Exchange following FCA decision

Retail ban still in place

Tom Eckett

Financial Conduct Authority FCA

The London Stock Exchange (LSE) will start accepting bitcoin and ethereum ETN applications in Q2 after the Financial Conduct Authority (FCA) greenlighted professional investor access to crypto ETNs.

On 11 March, the UK watchdog said it “will not object” to requests to list crypto ETNs on regulated exchanges in a bid to further develop the country’s crypto regulatory regime.

However, crypto ETNs in the UK will only be available to professional investors, with the ban on retail access still in place.

To list on the LSE, crypto ETNs must be physically backed, non-leveraged and offer exposure to bitcoin or ethereum only.

“Exchanges will need to continue to make sure sufficient controls are in place, so trading is orderly and proper protection is afforded to professional investors,” the FCA said.

“The FCA continues to believe cETNs and crypto derivatives are ill-suited for retail consumers due to the harm they pose. As a result, the ban on the sale of cETNs (and crypto derivatives) to retail consumers remains in place.

In January 2020, the FCA banned the sale of crypto derivatives and exchange-traded notes (ETNs) to retail investors.

“The FCA continues to remind people that crypto assets are high risk and largely unregulated,” the UK watchdog added. “Those who invest should be prepared to lose all their money.”

UK professional investors can already access crypto ETNs listed across Europe, however, the decision marks a step towards lifting the ban on retail access.

Mandy Chiu, head of financial product development at 21Shares, said: The decision by the FCA and the LSE to accept crypto ETP applications signals a very encouraging shift in the regulatory landscape in the UK.

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