ETC Group responds to FCA decision to ban the sale of exchange traded notes (ETNs) to retail investors
ETC Group, an issuer of digital asset backed securities listed on regulated stock exchanges, says the Financial Conduct Authority’s (FCA) decision to ban the sale of regulated exchange traded notes (ETNs) linked to cryptoassets to retail customers could result in more investors trading on unregulated markets without the rigorous market abuse protections of a regulated product on a major European exchange.
It also says the decision means more investors will have to manage their own Bitcoin storage, which could increase their risk of losing keys and becoming a victim of cyber-crime, for example, whereas with BTCetc, ETC Group’s Bitcoin exchange traded product (Ticker: BTCE), the security is kept safely in the investors brokerage account while managing the underlying Bitcoin is undertaken with high security levels and with insurance against theft.
Finally, ETC Group also says the FCA’s decision removes the ‘safety-net’ for retail investors that is provided by the suitability guidance of investment advisors when assessing the risk appetite and profile of their clients for these regulated products. Investors who want to gain access to this asset class are now left with less secure ways to invest in Bitcoin.
Bradley Duke, CEO of ETC Group said: “Cryptoassets like Bitcoin are becoming increasingly popular with investors. They provide many benefits to investors from diversification to strong potential for long-term growth. The FCA’s decision makes it harder for retail investors to access this, and those that do may be achieving this through channels and products that are riskier and provide less protection that those being banned.”