Leading crypto exchange-traded product (ETP) issuer 21Shares has urged the UK Financial Conduct Authority (FCA) to adopt a more globally aligned and inclusive approach as it considers lifting its ban on crypto exchange-traded notes (cETNs) for retail investors.
In its response to the FCA’s Consultation Paper CP25/16, which proposes allowing retail access to cETNs listed on UK recognised investment exchanges (RIEs), 21Shares welcomed the regulator’s progress. Still, they warned that the current proposals remain overly restrictive.
“While this consultation is a positive step forward, the proposed framework risks limiting investor choice and stifling innovation,”
said Duncan Moir, President at 21Shares.
The company flagged three primary concerns. First, the geographic restriction, which allows only cETNs listed on UK RIEs, excluding equivalent products listed on FCA-recognised overseas exchanges (ROIEs), which 21Shares argues would significantly limit options for retail investors.
Second, the firm cautioned that relying solely on UK exchanges for asset eligibility creates concentration risks. Currently, the London Stock Exchange lists only Bitcoin and Ethereum cETNs, meaning investors seeking diversified crypto exposure may turn to unregulated platforms instead.
Third, 21Shares opposed the FCA’s proposed classification of cETNs as Restricted Mass Market Investments (RMMIs). It argued that cETNs already adhere to strict listing, disclosure, and custody standards and that imposing RMMI rules could reduce market liquidity and hamper their inclusion in diversified portfolios.
To build a more competitive and innovation-friendly market, 21Shares recommended that the FCA recognise regulated cETNs listed on ROIEs, create a transparent framework allowing a wider range of cryptoassets as eligible underlyings, and classify cETNs as Readily Realisable Securities (RRS) rather than RMMIs.
“As a pioneer in crypto ETPs, we are ready to share market data and insights to help shape a regulatory regime that reflects the maturity of the global crypto market and the needs of UK retail investors,”
Moir added.
Meanwhile, in an effort to attract more retail investors, the ARK 21Shares Bitcoin ETF (ARKB) conducted a 3-for-1 stock split in June. The split aims to make ARKB’s shares “more accessible to a broader base of investors and enhance trading efficiency.
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