Written by Tom Wilson
LONDON (Reuters) – Britain's financial watchdog on Monday approved the launch of crypto-backed listed securities for professional investors, the latest move to allow digital asset products while protecting retail investors. became the regulatory authority for
The Financial Conduct Authority (FCA) said in a statement that such products – bonds issued by financial institutions that track the performance of underlying assets – are only available to investment companies and credit institutions authorized to operate in financial markets. Ta.
The FCA said its ban on crypto exchange-traded securities (ETNs) and derivatives for retail investors will remain, calling them “inappropriate” due to the “harm they cause”.
In a separate statement on Monday, the London Stock Exchange announced that it will accept applications for entry into Bitcoin and Ether ETNs from the second quarter of this year.
The U.S. Securities and Exchange Commission (SEC) approves the Spot Bitcoin exchange-traded fund, but calls Bitcoin a “speculative and volatile asset that can also be used for illegal activities” and urges investors to be cautious. As a result, the cryptocurrency market has soared in recent months.
Bitcoin hit an all-time high above $70,600 on Monday, boosted by inflows into Bitcoin ETFs and expectations that the U.S. Federal Reserve will soon cut interest rates.
The FCA said that with “better insights and data from long-term trading histories”, professional investors can better judge whether crypto ETNs meet their risk appetite. He said exchanges must ensure orderly trading and investor protection.
However, the FCA reiterated recent warnings, saying cryptocurrencies are “high risk and largely unregulated” and investors could “lose all their money.”
Jake Green, global head of financial regulation at law firm Ashurst, said the FCA's position on crypto investors and retail investors is in a “state of flux”.
He said the watchdog “obviously doesn't want to get around” the idea that “retail investors could potentially buy cryptocurrencies in the form of financial products regulated by the FCA.”
(Reporting by Tom Wilson; Editing by Amanda Cooper, Louise Heavens and Barbara Lewis)
