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Response welcomes progress but calls for more inclusive, globally aligned framework
London, 8 July 2025 – 21Shares, one of the world’s leading issuers of crypto exchange-traded products (ETPs), has submitted its official response to the UK Financial Conduct Authority’s (FCA) Consultation Paper CP25/16, which proposes lifting the current ban on the sale, marketing, and distribution of crypto exchange-traded notes (cETNs) to retail clients admitted to UK recognised investment exchanges (UK RIEs).
While 21Shares welcomes the FCA’s move to open the UK retail market to cETNs, it cautions that the proposed framework remains overly restrictive. In its response, 21Shares urges the regulator to adopt a more inclusive and innovation-friendly approach that reflects international best practices and provides UK investors with regulated, diversified access to the digital asset class.
In particular, 21Shares highlights three key concerns:
- Geographic limitation: The proposal restricts retail access to cETNs listed only on UK RIEs, ignoring equivalent products on FCA-recognised overseas regulated venues (ROIEs) and limiting investor choice.
- Asset concentration risk: While the FCA leaves eligibility of crypto assets to UK exchanges, this effectively concentrates power in the hands of mostly a single venue, the London Stock Exchange, which currently admits only Bitcoin and Ethereum. This setup risks driving retail investors to unregulated alternatives in search of broader exposure.
- Misclassification risk: 21Shares argues against classifying UK RIE-listed cETNs as Restricted Mass Market Investments (RMMIs), noting that such instruments are already subject to robust listing, disclosure, and custody standards. Applying RMMI rules would reduce liquidity, hamper innovation, and limit inclusion in diversified investment strategies.
21Shares recommends that the final regime:
- Recognise regulated cETNs from overseas exchanges (ROIEs)
- Mandate a transparent eligibility framework for a broader range of crypto assets as underlyings for cETNs
- Confirm that cETNs are treated as Readily Realisable Securities (RRS), not RMMIs
“As a pioneer in the crypto ETP space, we have long advocated for a regulatory framework in the UK that allows retail investors to access digital assets through transparent and well-regulated products,” said Duncan Moir, President at 21Shares. “This consultation marks an important moment, but more needs to be done. A competitive, forward-looking regime must reflect the maturity of the global crypto market and the diversity of investor demand.”
21Shares stands ready to assist policymakers and contribute market data and regulatory insights to ensure the UK becomes a competitive, well-regulated hub for crypto investment products.
To read 21Shares’ response to the FCA consultation in full, click here.
About 21Shares
21Shares is one of the world’s leading cryptocurrency exchange traded product providers and offers the largest suite of crypto ETPs in the market. The company was founded to make cryptocurrency more accessible to investors, and to bridge the gap between traditional finance and decentralized finance. 21Shares listed the world’s first physically-backed crypto ETP in 2018, building a seven-year track record of creating crypto exchange-traded funds that are listed on some of the biggest, most liquid securities exchanges globally. Backed by a specialized research team, proprietary technology, and deep capital markets expertise, 21Shares delivers innovative, simple and cost-efficient investment solutions.
21Shares is a member of 21.co, a global leader in decentralized finance. For more information, please visit www.21Shares.com.
