The FCA has confirmed it has lifted the ban on consumers investing money into crypto exchange traded notes (cETNs).

The regulator, previously reluctant to allow crypto products due to numerous scams, has lifted its consumer ban on crypto exchange trade notes (cETNs), with several products available.

The FCA lifted the ban on certain cETNs on 8 October.

Retail consumers can now access cETNs when they are listed on the FCA Official List and admitted to trading on a UK Recognised Investment Exchange.

Prospectuses must be reviewed and approved before the products can be bought. The FCA said it had already been reviewing retail crypto ETN prospectuses in preparation for the 8 October lifting of the ban.

The watchdog warns, however, that crypto ETNs are “complex products” and firms should ensure they have the correct permissions to offer them to consumers.

Where firms are planning to offer them, the FCA is asking firms to inform their FCA supervisory contact.  

The products are categorised as Restricted Mass Market Investments (RMMIs) and firms who offer them will need to comply with the financial promotion rules.  

As part of the permissions firms must:

• Not offer any incentives to invest
• Have robust appropriateness assessments, client categorisation and cooling-off periods
• Highlight relevant risk warnings

Firms offering cETNs will also need to comply with other rules, including the Consumer Duty.

This includes provisions requiring firms to:

• Act to deliver good outcomes for consumers
• Enable and support consumers to pursue their financial objectives  
• Act in good faith towards consumers and avoid causing them foreseeable harm
• Identify a target market of consumers for a cETN, design the product to meet the needs, characteristics and objectives of that target market, and take reasonable steps to ensure a cETN is distributed to the target market.  
• Ensure that cETNs provide fair value to consumers in the target market.
• Make sure consumers are given the information they need, at the right time, and presented in a way they can understand.  

• The FCA has outlined a crypto roadmap (PDF), setting out its plans to bring crypto assets into its regulation. The FCA recently published a consultation (CP25/25) on proposals for the application of its FCA Handbook to regulated cryptoasset activities.