London Stock Exchange Accepting Crypto ETN Apps Positive Move, FCA Remains Out of Step?
The London Stock Exchange has confirmed that it will begin accepting applications for bitcoin and ether exchange-traded notes (ETNs) in the second quarter of 2024 – but the Financial Conduct Authority (FCA) approving any of these products for UK retail investors is still very unlikely, say European product providers.
The FCA said it will not object to requests from “Recognized Investment Exchanges” to create a UK-listed market segment for crypto asset-backed ETNs. This announcement may have come after pressure the regulator is receiving from various groups on why a ban is still active, according to one product provider.
In January, the U.S. Securities Exchange Commission (SEC) approved almost a dozen spot Bitcoin exchange-traded products which in turn has triggered a Bitcoin rally and trading frenzy. BlackRock’s spot Bitcoin ETF trading under the ticker “IBIT” is leading the way and has reached $10 billion in assets under management (AUM) in record time.
Across the pond, the UK’s regulatory body the FCA first passed a ban on the sale of derivatives and ETNs back in October 2020 and this went into effect in January 2021. Back then the FCA said it considered crypto products to be “ill-suited” for retail consumers due to the potential harm they pose — this ban remains in place.
Crypto asset management firm Coinshares head of asset management Frank Spiteri said the news that crypto ETN applications are being accepted is a positive step — if only marginal.
“On the other hand, great to see the LSE opening up a segment for crypto ETNs; these products have thrived on European exchanges such as Xetra, Six Switzerland, and Euronext Amsterdam and Paris,” explains Spiteri.
However, despite the progress made in accepting applications for
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