Trading 212's Crypto ETN Oversight: What Went Wrong?

Trading 212, a major player in the online investment world, found itself in hot water recently. The platform allowed UK customers to trade crypto-linked exchange-traded notes (ETNs) without the proper green light from the Financial Conduct Authority (FCA). This oversight came to light through a report, highlighting a significant regulatory misstep. Crypto ETNs made a comeback in the UK retail market in October 2025 after the FCA lifted a ban that had been in place since 2021. These financial products track the price of digital assets like Bitcoin and require specific regulatory approval to be sold to everyday investors. Despite this, Trading 212 offered these products without the necessary authorization until recently. The company only applied for the required permission after being contacted by FCA supervisors. This raises questions about the platform's internal processes and regulatory compliance. Trading 212 briefly paused access to complex instruments, including crypto ETNs, citing internal system upgrades. By Monday, the FCA register showed that Trading 212 had been granted permission to sell debentures.Crypto ETNs are classified as restricted mass market investments, meaning they come with strict rules. These include risk warnings, cooling-off periods, and suitability checks to protect consumers. Other platforms like Interactive Investor, Fidelity, and Freetrade have been offering crypto ETNs since October, but they had the necessary approvals in place when the ban was lifted. The FCA has emphasized the importance of reviewing and approving prospectuses before launching crypto ETNs. These products are complex, and firms must ensure they have the correct permissions to offer them to consumers. The regulator's stance underscores the need for caution and thorough vetting in the crypto space. Looking ahead, the UK crypto market could see a significant boost. A research report from trading platform IG predicted a 20% expansion following the launch of crypto ETNs. The appeal lies in the perceived safety and regulatory oversight these products offer, with 30% of UK adults considering investing in crypto via ETNs. However, current levels of crypto ownership stand at 12% according to the FCA and 25% according to IG's study. This gap highlights both the potential and the challenges ahead for the crypto market in the UK.