The FCA’s Decision to Allow Crypto ETFs in the UK
In a significant development for the cryptocurrency landscape in the UK, the Financial Conduct Authority (FCA) has softened its stance on cryptocurrency exchange-traded products (ETPs). This has led to a flurry of crypto ETF providers rushing to offer their services in the nation. However, there is a catch – only professional investors are allowed to participate in this trading activity.
FCA’s Ruling Draws Criticism
While this decision marks a milestone for the country compared to its previous stance on crypto ETPs, industry figures remain critical of the FCA’s choice to exclude retail investors from buying these products.
Rush of Crypto ETF Providers
Following the FCA’s decision to allow appeals from trading floors like the London Stock Exchange and Cboe UK to list crypto-backed ETPs, renowned providers such as CoinShares, WisdomTree, and VanEck have rushed into the UK market. However, only financial institutions like investment firms, credit institutions, pension funds, and insurance companies can participate in buying these products.
- CoinShares’ head of product, Townsend Lansing, stated that they are looking forward to engaging with the LSE about listing opportunities.
- WisdomTree sees the LSE as a more convenient access point for UK-based professional investors interested in exposure to crypto ETPs.
- VanEck is considering listing its crypto ETNs in the UK following the FCA’s ruling.
Backlash Against Ban on Retail Investors
The FCA previously stated that it views crypto ETNs and derivatives as unsuitable for retail consumers due to potential harm. However, retail investors are still free to buy cryptocurrencies directly on exchanges, which contradicts the FCA’s stance on ETPs.
CoinShares’ Lansing expressed disappointment at the FCA’s treatment of retail investors in the UK, as investors in other parts of the US and Europe can access regulated listed products in the digital assets space.
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