Trading 212 to Enable UK Retail Crypto ETN Trading Without FCA Approval, FT Reports

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 What Happened — Trading 212 and Crypto ETN Access

According to a Financial Times report, Trading 212 — one of Europe’s largest online investment platforms — allowed UK retail investors to trade crypto‑linked exchange‑traded notes (ETNs) without the correct FCA authorisation for several months after the UK regulator lifted its ban on such products. The situation unfolded as follows: (Finance Magnates)

 Background on Crypto ETNs in the UK

  • The Financial Conduct Authority (FCA) reversed a long‑standing ban on retail access to crypto ETNs in October 2025, allowing everyday investors to trade these products — which track the price of cryptocurrencies such as Bitcoin (BTC) — on approved exchanges like the London Stock Exchange. (Reuters)
  • Crypto ETNs are debt‑linked securities that mirror the performance of the underlying crypto asset without customers owning the asset directly. They are considered “restricted mass market investments” requiring specific FCA approval and clear consumer protections before being offered to retail investors. (BitDegree)

The Regulatory Misstep

  • After the ban was lifted, Trading 212 reportedly began offering crypto ETNs to UK retail clients from around October 2025 onwards — before it had the necessary FCA authorisation to sell those products to retail investors. (Finance Magnates)
  • The Financial Times report says the broker only applied for the additional FCA permission after supervisors at the regulator contacted it, and that approval was granted later in January 2026. (Finance Magnates)
  • During the interim, the platform advertised and allowed trading in these crypto products — an apparent breach of regulatory rules requiring firms to have the correct permissions before offering such investments to retail clients. (Finance Magnates)

 Platform Behaviour

  • A now‑deleted post on Trading 212’s website acknowledged a temporary pause in access to “complex instruments including crypto ETNs” while the company upgraded internal systems, but the offer of ETNs had already been active before the registration was in place. (Finance Magnates)

 Why This Matters — Regulatory & Investor Implications

 FCA Permission Is Required

  • Even though the ban on retail crypto ETNs was lifted, firms are required to obtain specific FCA permissions and meet strict marketing and consumer protection rules before offering these products to retail investors. That includes ensuring prospectuses and promotion materials are compliant with FCA standards. (BitDegree)
  • ETNs are considered high‑risk and complex instruments, and the FCA’s rules around them are intended to ensure that retail investors are adequately protected — in contrast with unregulated crypto exchange exposure. (BitDegree)

 Investor Protection Concerns

  • Allowing retail access without proper authorisation exposes individual investors to risks of misselling and unsuitable advice since proper suitability checks and risk disclosures are part of regulated distribution rules. (BitDegree)
  • It also raises questions about compliance systems and controls at investment platforms when launching new financial products that span traditional markets and digital assets.

 Industry & Regulatory Context

 Broader Crypto Market Movement

  • The FCA’s change to allow retail access to crypto ETNs was part of a broader shift toward integrating regulated crypto products into mainstream UK investment markets — including discussions on holding crypto ETNs in certain ISA or pension wrappers. (Financial Times)

 Reactions & Commentary

  • Competitors like Interactive Investor, Fidelity and Freetrade are reported to have already offered crypto ETNs with the necessary permissions in place when the ban was lifted, contrasting with Trading 212’s regulatory timing. (Finance Magnates)
  • Some commentators see the episode as a reminder of the importance of strict regulatory adherence in emerging financial product launches, especially in areas like crypto where investor risk profiles can be significantly higher.

 What Comes Next

  • Trading 212 has secured the relevant FCA permission to offer crypto ETNs to UK retail clients after intervention from the regulator. (Finance Magnates)
  • The situation could prompt the FCA to review how firms implement product launches and ensure that products requiring prior authorisation are not offered prematurely.
  • Retail investors are still advised to consider the complexity and risk profile of crypto ETNs, which can entail credit risk, volatility and other structural risks.

 Summary

  • Trading 212 offered crypto‑linked exchange‑traded notes (ETNs) to retail investors in the UK without having FCA approval, according to the Financial Times. (Finance Magnates)
  • The UK regulator lifted its ban on retail crypto ETNs in October 2025, but firms must still obtain specific authorisation before offering them. (Reuters)
  • After being contacted by FCA supervisors, Trading 212 applied for and received the proper permissions only in January 2026. (Finance Magnates)
  • The episode underscores the ongoing challenges in regulating and integrating crypto products into mainstream retail investment platforms while maintaining investor protections. (BitDegree)

Here’s a case‑study and commentary‑style breakdown of the Financial Times‑reported issue in which **Trading 212 allowed UK retail customers to trade cryptocurrency exchange‑traded notes (ETNs) without having the required Financial Conduct Authority (FCA) approval — including what happened, concrete examples, regulatory context and reactions. (MEXC)

Case Study 1 — Retail Crypto ETN Trading Launched Without FCA Permission

What happened:
According to The Financial Times, Trading 212 — one of Europe’s largest online brokers — permitted UK retail customers to trade crypto‑linked exchange‑traded notes (ETNs) even though the company did not yet have the specific FCA approval required to offer these products to retail investors. (MEXC)

Key points from the situation:

  • Crypto ETNs returned to the UK retail market in October 2025 after a regulatory ban that had been in place was lifted, allowing these products to be admitted for retail trading through exchanges such as the London Stock Exchange. (docs.londonstockexchange.com)
  • Trading 212 began offering crypto ETNs that track assets like Bitcoin before it had received the required FCA permission to sell them to everyday investors. The platform reportedly did this until early 2026, when it applied for and obtained the relevant authorisation after FCA supervisors contacted the firm. (MEXC)
  • ETNs are debt‑linked securities that mirror the performance of an underlying asset (e.g., crypto prices) but carry issuer credit risk. They are treated as complex financial products that require explicit FCA approval before being marketed to retail clients. (docs.londonstockexchange.com)

Example timeline:

  • 8 Oct 2025: UK FCA ban on crypto ETNs lifted and retail access enabled under regulatory framework. (docs.londonstockexchange.com)
  • Late 2025: Trading 212 appears in practice to accept retail orders for these ETNs prior to having approval listed at the FCA Register. (MEXC)
  • Late Jan 2026: After regulatory contact, Trading 212 applied for and secured the required permissions. (MEXC)

Commentary:
This episode demonstrates a compliance gap in how some fintech platforms introduce new products tied to digital‑asset prices — particularly in regulated markets where consumer protections and marketing standards are strict.

Case Study 2 — What the Rules Are Supposed to Be

Regulatory context:
Even after the FCA lifted the retail ban on crypto ETNs in October 2025, firms must still:

  • Have the correct permission on the FCA Register for each product category they offer; and
  • Meet complex product, adviser suitability and Consumer Duty disclosure standards before marketing these to UK retail investors. (docs.londonstockexchange.com)

This includes careful risk disclosures and suitability testing due to the volatile and complex nature of crypto ETFs/ETNs — unlike typical exchange‑traded products. (docs.londonstockexchange.com)

Wider example:
Other firms such as Fidelity International and Freetrade had already secured the needed FCA approvals for retail crypto products by late 2025, illustrating the standard the regulator expects for compliant offerings. (adviserservices.fidelity.co.uk)

Reactions & Commentary

Regulatory watchdog perspective:

  • Financial regulation experts note that offering retail financial products without specific approval undermines investor protections, especially for complex instruments like ETNs that carry credit and market risk.
  • The FCA’s strict authorisation process is designed not only to approve products but to ensure firms have appropriate systems, disclosures and risk management before retail rollout.

Industry voices:

  • Some analysts say this episode highlights how rapid innovation in fintech and crypto markets can outpace internal compliance controls.
  • Others see it as an example of the tension between product availability and regulatory rigour — particularly when regulated brokers serve both retail and sophisticated clients.

Retail investor concerns:

  • Users of Trading 212 and investors following the rollout have voiced confusion about when and how these products became available on their platforms before formal regulatory clearance — pointing to mixed messaging around access criteria and risk flags. (Community discussions indicate ongoing uncertainty about ISA treatment and trading mechanics for crypto ETPs/ETNs on trading platforms. (Reddit))

Editorial Insight — Why This Matters

Investor Protection vs. Innovation:
This situation at Trading 212 underscores a broader challenge in the UK’s evolving crypto‑investment landscape: balancing innovation and consumer access with the robust regulatory safeguards required under FCA rules.

Compliance Signals:
Trading 212’s experience may prompt other platforms to re‑review product rollout protocols, especially for complex instruments that straddle the traditional and digital finance worlds.

Market impact:
While crypto ETNs represent an important avenue for regulated crypto exposure within UK investment portfolios, episodes like this risk eroding retail investor confidence if authorisation frameworks are bypassed or appear unclear.

 Summary

  • Trading 212 reportedly allowed UK retail investors to trade cryptocurrency‑linked ETNs before having the necessary FCA approval, according to reports citing the Financial Times. (MEXC)
  • Crypto ETNs became available to retail investors after an FCA ban was lifted in October 2025, but firms still require specific permissions and disclosures before offering them. (docs.londonstockexchange.com)
  • The platform applied for the relevant permissions only after FCA intervention, illustrating a compliance gap and triggering scrutiny over regulatory controls in fintech product launches. (MEXC)
  • Reactions emphasise the importance of clear investor protections and firm adherence to regulatory processes — especially for products that carry higher risk profiles. (General industry commentary)

 

 

Categories: GB News, UK News