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FCA updates position on cryptoasset Exchange Traded Notes for professional investors


The Financial Conduct Authority will not object to requests from Recognised Investment Exchanges (RIEs) to create a UK listed market segment for cryptoasset-backed Exchange Traded Notes (cETNs). These products would be available for professional investors, such as investment firms and credit institutions authorised or regulated to operate in financial markets 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. cETNs must meet all the requirements of the UK Listing Regime, for example on prospectuses and on-going disclosure.

With increased insight and data due to a longer period of trading history, the FCA believes exchanges and professional investors should now be able to better establish whether cETNs meet their risk appetite.  

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. 

The FCA continues to remind people that cryptoassets are high-risk and largely unregulated. Those who invest should be prepared to lose all their money. 

The FCA is collaborating with government, international partners and industry to develop the UK’s cryptoasset regulatory regime and lead international standards in this space.