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UK retail investors face delays before they can buy regulated crypto products, frustrating consumers eager to take advantage of a surge in the price of digital tokens.
The Financial Conduct Authority, the UK regulator, in August said it would lift its ban on crypto exchange traded products for retail investors from next Wednesday.
But investors may have to wait nearly a week longer before they can buy bitcoin and ether-linked products, according to five people familiar with the matter.
Although it is expected to be a relatively short delay, it has angered industry executives who largely blamed the regulator, and follows criticism of the UK watchdog for its cautious approach to crypto.
“It doesn’t seem logical that the ban’s lifted and retail won’t be able to purchase on the same day,” said one person.
“There’s been plenty of time [to prepare],” said a senior crypto industry executive, adding that “it’s been very, very short notice to get everyone in over the line”.
Companies wishing to run crypto exchange traded products must submit their prospectuses to the FCA for approval, but the agency only began accepting prospectuses on Thursday last week, just two weeks before the products were expected to launch.
The move to allow retail investors to buy bitcoin and ether digital tokens via regulated, exchange-listed products rather than using those not recognised by the regulator has been welcomed by UK investors, who have watched as their US peers pour billions of dollars into similar products.
UK retail investors and the crypto industry have clamoured for access to the products, saying they have been left behind.
Bitcoin, the world’s most popular digital token, has surged to $120,000 — doubling in value since October last year. Donald Trump’s support for the crypto industry has sent the price of bitcoin and other tokens such as ether to record highs this year, and investors rushing into the asset class.
Exchange traded notes (ETNs) track an underlying index and are listed and traded on an exchange. In most respects they function in the same way as exchange traded funds.
The FCA has long taken a hardline stance against crypto investment in an attempt to shield investors from volatility and fraud.
In March 2024, it finally gave the green light for crypto ETNs to list on the London Stock Exchange, but limited access to institutional investors.
Two people said the delay was because the regulator and LSE were discussing whether another part of the exchange or segment was needed on the venue for the retail-focused products. They were “going back and forth” on it, one person said.
The discussion and delay highlights the UK’s struggles with how best to manage crypto products.
“We had to wait until the segment opened on the LSE before we could start reviewing prospectuses,” the FCA said. “That happened on September 23 and we started accepting prospectuses for review two days later.”
It added that lifting the ban “allows people to make the choice on whether such a high-risk investment is right for them”.
The FCA will take days to review each company’s prospectus and may seek further comments from them, which could delay launches until at least October 13, the people said. After the regulator approves the products, the London Stock Exchange must also approve their listing on its venue.
Alex Watkins, exchange traded product business development lead at the London Stock Exchange, said the move would “provide retail investors with further options to diversify their portfolios”.
In the absence of crypto exchange-traded products, some retail investors have bought into so-called crypto-treasury companies, some of which are listed in London, and whose prices have collapsed in recent weeks.
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