The Financial Conduct Authority has changed its stance and will now allow recognised investment exchanges to create cryptoasset-backed exchange notes (cETNs)on the UK market.

These products would be available for professional investors, such as investment firms and credit institutions authorised or regulated to operate in financial markets only.

Exchanges will need to continue to make sure sufficient controls are in place, so trading is orderly and proper protection is afforded to professional investors.

The FCA did stipulate that cETNs must meet all the requirements of the UK Listing Regime, for example on prospectuses and on-going disclosure.

With increased insight and data due to a longer period of trading history, the FCA believes exchanges and professional investors should now be able to better establish whether cETNs meet their risk appetite.

However, the FCA continues to believe that cETNs and crypto derivatives are ill-suited for retail consumers due to their perceived risks.

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As a result, the ban on the sale of cETNs and crypto derivatives to retail consumers will remain in place.

Even with the new allowances, the FCA continues to warn people that cryptoassets are high risk and largely unregulated – those who invest should be prepared to lose all their money.