The UK government, through the Financial Conduct Authority (FCA), has lifted the ban on cryptocurrency-backed exchange-traded notes (ETNs) for professional investors, effective October 2025, marking a significant shift in its crypto regulatory stance. For crypto investors, financial advisors, and regulatory analysts searching UK crypto ETN ban lifted 2025, FCA crypto ETN professional investors, or Bitcoin Ethereum ETN LSE, the decision reverses a 2021 restriction that barred crypto ETNs for retail investors due to volatility and fraud risks, while now permitting professional investors—defined as those with £500,000+ portfolios or relevant expertise—to trade Bitcoin and Ethereum ETNs on the London Stock Exchange (LSE). The FCA approved listings from issuers like WisdomTree and 21Shares, with trading volumes reaching £120 million in the first week of October 2025. The retail ban remains, but the move aligns with global trends, following US Bitcoin ETF approvals ($58 billion AUM) and Hong Kong’s crypto ETN launches.
This policy shift reflects the UK’s aim to become a crypto hub under Prime Minister Keir Starmer, balancing investor access with stringent oversight.
Policy Details: Professional Investors Gain Access
The FCA’s decision, announced on October 7, 2025, allows crypto ETNs—securities tracking Bitcoin or Ethereum prices backed by physical crypto assets—for professional investors only.
- Scope: Bitcoin and Ethereum ETNs listed on the LSE; no other cryptocurrencies yet.
- Professional Investors: Defined as those with £500,000+ portfolios, financial sector experience, or institutional status.
- Trading Volume: £120 million in first week, led by WisdomTree Bitcoin ETN (BTCW) and 21Shares Ethereum ETN (ETHW).
- Retail Restriction: 2021 ban upheld due to volatility (Bitcoin +45% YTD 2025) and fraud risks.
FCA statement: “This ensures investor protection while enabling controlled access to crypto assets.”
| ETN | Issuer | Asset | First Week Volume (£M) |
|---|---|---|---|
| BTCW | WisdomTree | Bitcoin | 70 |
| ETHW | 21Shares | Ethereum | 50 |
Regulatory Context: UK’s Crypto Hub Ambition
The UK’s decision follows a 2021 FCA ban on crypto derivatives for retail investors, citing high volatility and inadequate protections. The new policy aligns with:
- Global Trends: US Bitcoin ETFs ($58 billion AUM in 2025); Hong Kong’s crypto ETNs.
- Starmer’s Vision: Plans to make the UK a blockchain hub, with crypto firms required to register with the FCA.
- Safeguards: Mandatory risk disclosures and anti-money laundering checks for ETN issuers.
Implications: Institutional Access vs. Retail Exclusion
The policy shift has mixed impacts:
- Institutional Boost: Opens crypto exposure for hedge funds and high-net-worth individuals; £500M AUM projected by 2026.
- Retail Barrier: Continued ban limits mainstream adoption, pushing retail to unregulated platforms.
- Market Signal: Signals UK’s pro-crypto stance, potentially attracting global issuers.
Conclusion: UK’s Crypto ETN Revival
The UK’s lifting of the crypto ETN ban for professional investors in October 2025 opens Bitcoin and Ethereum trading on the LSE, with £120 million in initial volumes. While retail remains excluded, it’s a step toward a crypto hub. For markets, it’s a controlled leap—will retail access follow? The coins trade. reuters
