UK's FCA Maintains Restrictions on Crypto ETNs Despite Lifting Retail Ban

The UK Financial Conduct Authority (FCA) has lifted the retail ban on crypto exchange-traded notes (ETNs) as of October 2025, but access remains heavily restricted. According to PANews, Bitcoin ETNs are classified as 'restricted mass market investments,' requiring investors to undergo risk warnings, suitability tests, and cooling-off periods, without the protection of the Financial Services Compensation Scheme. Major banks like HSBC and Barclays have imposed limits on transfers to crypto exchanges, with some banks even blocking such transactions entirely. The head of European financial institutions at Bitwise Asset Management criticized the FCA's 'same risk, same regulation' principle as overly broad, equating Bitcoin with speculative tokens and forcing investors to turn to less regulated offshore platforms. Starting April 2026, crypto ETNs will be excluded from mainstream ISA tax-free accounts and can only be held in innovative finance ISAs, further limiting tax-advantaged holding options. Critics argue that these regulatory measures, intended to reduce risk, may inadvertently push investors towards riskier environments, contradicting the original intent of consumer protection.