In late 2025, UK retail investors gained access to crypto-linked exchange traded notes (ETNs) after the regulator lifted a long-standing ban.
Within weeks, questions emerged about whether platforms were offering these products in line with the new rules — and how tightly that reopening was being policed.
Attention intensified after reporting that Trading 212 sold crypto ETNs to UK retail customers before receiving the specific authorisation required from the Financial Conduct Authority. The episode has become a case study in how regulatory transitions work in practice — and where grey areas can appear for firms and investors alike.
Why this matters now for retail investors
Crypto ETNs only became available again to UK retail buyers in October, after a ban introduced in 2021 was reversed. The reopening was tightly framed: firms could offer the products, but only with explicit approval to do so.
That distinction matters because ETNs are not funds. They are debt instruments that track the price of an underlying asset, meaning investors are exposed not just to crypto volatility but also to the issuer’s credit risk. For retail users, the safeguards around who can sell them — and under what permissions — are a key part of the risk framework.
What changed when the ban was lifted
When the FCA overturned the ban, it did not create a free-for-all. Platforms already authorised for activities like share dealing or CFDs still needed separate permission to distribute crypto ETNs to retail clients.
This is where confusion can arise. A firm may be fully authorised to operate in the UK market while still lacking approval for a newly permitted product class. From the outside, that distinction is often invisible to customers using a single app interface.
What the Trading 212 episode shows
According to reporting by the Financial Times, Trading 212 began offering crypto ETNs shortly after the ban was lifted, before applying for — and receiving — the required authorisation. The application was reportedly prompted by discussions with FCA supervisors and was granted earlier this week.
During that period, the platform paused new purchases while continuing to advertise the products, citing system upgrades. Once approval was granted, the purchase prompts reappeared. The firm has not disputed the sequence of events, and the FCA has not announced any enforcement action.
Where uncertainty and exposure remain
For investors, the key uncertainty is not about the product’s legality today, but about what happens when regulatory transitions are still settling. Retail users rarely see the boundary between a firm’s general authorisation and product-specific permissions.
For firms, the episode highlights how quickly regulatory expectations can crystallise after a rule change. Even when a market opens, supervisors may still be testing how platforms implement controls, disclosures, and eligibility checks in real time.
How this affects the wider market
Other platforms — including large, established brokers — also offer crypto ETNs in the UK. The Trading 212 case does not suggest systemic non-compliance, but it does underline that the FCA’s reopening of the market is conditional and closely monitored.
It also shows why regulators often reopen high-risk markets cautiously. Crypto ETNs sit at the intersection of retail access, complex instruments, and volatile assets, making oversight as much about timing and process as about outright permission.
Where oversight typically sits
In situations like this, responsibility is rarely binary. Regulators assess conduct based on timing, disclosure, supervisory engagement, and how quickly firms respond when concerns are raised. Authorisation gaps do not automatically imply penalties, particularly when firms seek approval and adjust behaviour promptly.
That discretion is deliberate. It allows regulators to correct behaviour without necessarily escalating every issue into formal enforcement — especially during periods of regulatory change.
What questions remain open
The FCA has not indicated whether it will review past crypto ETN sales made before authorisation was granted, or whether any remedial steps are required. For now, the episode remains unresolved rather than closed.
As crypto-linked products continue to re-enter the UK retail market, similar questions are likely to resurface — not about whether investors can access them, but about how clearly the rules are drawn, communicated, and enforced as markets evolve.
