“Crypto ETNs admitted to trading on LSE are only appropriate for professionals,” exchange staff wrote.
The London Stock Exchange (LSE) will launch cryptocurrency exchange-traded notes (ETNs) tracking the performance of Bitcoin (BTC) and Ether (ETH) on May 28.
According to the March 25 announcement, applications for the crypto ETNs can be submitted as soon as April 8, and successful funds will be listed the following month contingent on the approval by the country’s Financial Conduct Authority (FCA). Additionally, issuers must submit a draft prospectus and a letter explaining why they meet ETN requirements by April 15.
Despite substantial investor interest, the ETNs will only be available to professional investors as per the U.K. FCA’s ban on the sale of crypto derivatives and ETNs enacted in January 2021. To be approved, crypto ETNs must be physically backed, non-leveraged, have a reliable value of the underlying market price, and can only be denominated in Bitcoin or Ether. The underlying assets must be held in cold storage by an Anti-Money Laundering licensed custodian in the U.K., EU, or the U.S.