FCA: Ban crypto ETNs, Coinshares responds

CoinShares has presented a response to the ETN ban proposal by the UK's Financial Conduct Authority. The European digital asset manager strains against banning all derivatives or exchange notes and cites the volatility risks involved in other highly leveraged ETNs that do not wander under the prohibition. FCA declares the crypto ETNs as the loss inducing assets, but CoinShares reports the gaining aspects of the coins.


CoinShares, the largest manager of digital assets in Europe, has responded to the ban on the sale of crypto ETNs to retail investors, proposed by the Financial Conduct Authority of the UK. The FCA has cited the high volatility, lack of intrinsic value, and price discovery as the main reasons for proposing a prohibition that can protect the retailers from adverse effects. However, CoinShares has risen to protest against the rule.

The firm affirms that the ban should be restricted to the Commodity Deposit Forms (CDFs) and other high margin derivative products, and omit the 1:1 ETNs. It also points out the prohibition free zone the other ETNs, including the natural gas and oil, witness despite possessing similar volatility risks.

The released response states, “ETNs are regulated products, listed on recognized exchanges, traded through regulated brokers and subject to the extensive disclosure and transparency requirements required by the Prospectus Directive and other regulations governing listed securities.”

The UK financial regulator also noted the loss inducing tendencies of cryptocurrencies to which CoinShares reverted with a profitable performance of the crypto derivatives. It also argued that most retailers live in the dark, unaware of the utility of digital coins. In retort, the firm has cited that crypto is much more understood than other derivatives like rhodium or EU carbon credits.

Retail investors have primarily led the crypto era. Do you think FCA’s proposal is justified?

Saloni Sheelwant
Saloni Sheelwant treasures to research and write about the new startups and technologies thriving at a very fast pace.

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