Crypto ETNs: What IFAs Need To Know

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If you’re an independent financial adviser (IFA) it’s likely you’ve fielded many enquiries about cryptocurrencies over the years.

Traditionally the majority of IFAs have been crypto adverse, but the launch of regulated crypto Exchange Traded Notes (cETNs) to the retail market in 2025 will force many to re-think this approach.

The Financial Conduct Authority’s (FCA) decision to allow individual investors access to cETNs after a lengthy period of consultation marks a pivotal shift in the UK’s financial landscape.

For financial advisors it will present both opportunities and challenges.

The firms offering cETNs and the advisers who’ll deal with client enquiries will need to comply with the FCA’s requirements and financial promotion rules to ensure that the correct risk disclosures are in place and that consumers are protected.

It’s also vital that IFAs ensure they have the necessary expertise and permissions to provide guidance on cETNs and build a broad understanding of the crypto landscape to enable them to tackle enquiries with confidence and authority.

Here I take a look at the key areas IFAs should familiarise themselves with.

What are crypto ETNs?

A cETN is a debt security traded on a stock exchange which aims to track the price of a cryptocurrency such as Bitcoin or Ethereum.

They offer a way for retail investors to gain exposure to cryptocurrency without having to buy and hold the underlying asset themselves.

This makes it much easier for people who don’t wish to get involved in the technical side of buying and storing crypto on their own to access the market.

> Read more about cETNs here

What are the risks involved with cETNs?

Crypto investing comes with its own unique risks and the regulation of the sector is rapidly evolving. Here are some of the key risks to consider:

Price swings: Crypto remains a highly volatile, high-risk asset class.

Issuer risk: cETNs are debt securities meaning that if the issuer fails, investors may lose all their money.

Custody risks: UK-listed cETNs are backed with the crypto they track. The crypto held could be stolen or lost due to operational failures.

No FSCS protection: Although the cETNs are regulated, they are not covered by the Financial Services Compensation Scheme.

What IFAs need to consider

Clients will need to be given clear risk warnings specific to cETNs which highlight the volatility of the market and the likelihood of large price movements in a short space of time.

During the advice and suitability process it’s important to carefully document the client’s objectives and rationale behind their desire to add crypto to their portfolio.

When giving advice, cETNs should be treated as a potential satellite holding in the context of the risks involved and an appropriateness assessment should be carried out.

To help clients understand exactly what they’re investing in, advisers should prepare short explainers covering cETNs and the crypto sector as a whole. Staff need to be trained so they can present this to clients and confidently field any questions.

Any promotion or marketing of cETNs must comply with COBS 4 to ensure the communication is clear, fair and not misleading. Promotional materials should also carry prominent risk warnings.

Advisers will also need to update their policies to cover cETNs to ensure they comply with their consumer duties. They also need to keep Anti-Money Laundering (AML) policies up-to-date.

Additionally, any adviser entering the cETN space should ensure they stay up-to-date with future developments and evolving rules under the FCA’s crypto roadmap and MiCA across Europe.

Tax wrappers and cETNs

Some cETNs may be ISA/SIPP eligible but this will need to be confirmed on a product-by- product basis.

This needs to be confirmed with the cETN provider to ensure that the product fits the client’s requirements.

At a glance

Launch date: October 8, 2025.

Listing requirements: Must be on an FCA-approved Recognised Investment Exchange (RIE).

Marketing Rules: Must follow FCA’s Financial Promotion rules (COBS 4)

Consumer Duty: IFA’s duty to act for clients’ best interests and provide fair, clear advice.

FSCS: cETNs are not protected under the FSCS.

Product Risk: High volatility, counterparty risk, potential to lose entire investment.

Tax wrapper potential: ISA/SIPP eligible depending on provider.

Regulatory evolution: Monitor future updates and regulatory developments.

Educate clients: Ensure your team can explain what cETNs are and how they differ from holding actual crypto assets.

Need more help?

If you need any guidance on cryptocurrency to help support your clients, we can help. Please get in touch.