UK Regulator Eases Bitcoin Access – But Is It Really Open?

In January 2024, the U.S. Securities and Exchange Commission approved spot Bitcoin ETFs. Millions of retail investors gained regulated, direct exposure to bitcoin for the first time.

In that same period, the UK moved in the opposite direction. Despite Prime Minister Rishi Sunak’s pledge to make Britain a global crypto hub and a place for innovation and growth, the UK took a different approach. It tightened restrictions that kept retail investors locked out of similar products.

Two years on, the reality for UK investors is very different. Despite recent regulatory changes, access to bitcoin is still fragmented, constrained and often hard to obtain. This is leading to worse outcomes for the consumers the FCA is meant to protect.

Different Assets, Same Rules

The Financial Conduct Authority is the UK’s independent regulator, overseeing more than 40,000 firms with a mandate to protect consumers, ensure market integrity and promote competition and economic growth.

In its approach to cryptoassets, it applies a “same risk, same regulation” principle, grouping bitcoin with speculative assets such as meme coins due to their volatility and potential for harm – arguably misunderstanding the differing risk profiles of these very different assets. This led to the 2021 ban on retail sales of crypto derivatives and exchange traded notes, known as ETNs, with the FCA citing widespread losses and unreliable valuations.

This framing overlooks key differences. Bitcoin is a decentralised monetary network with a fixed supply, global liquidity, and a 15 year track record. Treating it as equivalent to speculative tokens under a “same risk, same regulation” framework ignores key differences. It places very different risk profiles into a single category. This can lead to counterproductive policy outcomes.

“Good regulation should bring investors into safer environments, not push them out of them,” says Ray Dillet, Head of Financial Institutions Europe at Bitwise Asset Management. “The FCA’s ‘same risk, same regulation’ principle is directionally right, but in crypto it is being applied too bluntly. Bitcoin is fundamentally different to most other cryptoassets. It’s a neutral asset, has no issuer and behaves more like a digital commodity than a speculative tech asset.

By failing to reflect that distinction, the UK risks driving investors away from regulated products and into offshore venues with significantly higher risk. That is the opposite of consumer protection.”

The FCA has begun to adjust its position. Following consultation, it lifted the ban on crypto ETNs listed on recognised UK exchanges, effective October 8, 2025. As the FCA stated in February 2026 correspondence to a Member of Parliament:

“In June 2025, the FCA launched a consultation on proposals to lift the ban on retail access to certain cETNs, which demonstrated our commitment to supporting the growth and competitiveness of the UK’s crypto industry, rebalancing our approach to risk by allowing consumers to make a choice on whether such a high-risk investment is right for them.”

The change allows retail access within a regulated framework, subject to restrictions. These include classification as a Restricted Mass Market Investments, which mandate risk warnings, appropriateness tests and cooling off periods for consumers who try to buy them.

On paper this seemed like progress, but in practice it fell short.

Access In Theory, Friction In Reality

While the FCA reopened the door to bitcoin products, practical barriers remained. Banking restrictions are among the most significant. Major banks, including HSBC, Barclays and NatWest, impose limits on transfers to cryptoasset exchanges. Others, such as Chase UK, Metro Bank, Starling and TSB, restrict or block them, citing fraud and consumer protection. In some cases, these restrictions affect lawful transactions to regulated platforms, and block what customers choose to do with their own money.

Industry reports suggest a large proportion of transactions are delayed or declined, with exchanges reporting rising onboarding friction. Within regulated products, investors face additional checks and disclosures not seen in comparable asset classes.

The result is not reduced risk but displaced risk. Users are pushed toward offshore platforms, informal markets, or unregulated proxies where protections are weaker or do not exist.

Jamie Nuttall, director of crypto tax at Myna L2, says “The FCA’s approach to bitcoin does not reduce risk. It simply moves it offshore and, in many cases, makes it invisible. With a plethora of options available globally, retail investors will always find a way to sidestep regulation when it comes to decentralised assets in order to remain exposed.”

This creates a contradiction at the heart of the FCA’s approach. Measures meant to reduce harm instead change where and how risk is taken, and potentially has the unintended consequence of actually increasing that risk. Much of the risk then moves beyond the reach of the protections they are meant to enforce.

Nuttall adds, “This is likely to create a far bigger problem, exposing investors to platforms with fewer restrictions, less oversight, and significantly higher risk. All for simply wanting to access a globally available asset class. The FCA’s consumer protection mandate is ultimately undermined by the very enforcement restrictions designed to uphold it.”

The FCA emphasizes these measures as necessary:

“The classification of cryptoassets as Restricted Mass Market Investments (RMMIs) under our financial promotions rules means that these safeguarding marketing frictions, such as risk warnings, are necessary… With cryptoassets treated as RMMIs, our rules ensure that promotions of cryptoassets are fair, clear, and not misleading.”

Additionally, the FCA makes it clear that “there won’t be coverage from the Financial Services Compensation Scheme (FSCS).”

From early 2016 to March 2026, Bitcoin delivered cumulative returns of approximately 16,300%, outperforming the S&P 500’s ~300% total return and gold’s ~300% gain over the same period. The divergence raises questions about whether UK investors are being protected from risk or from opportunity.

Tax Efficient Access

The situation worsens with the upcoming tax changes. From April 6, 2026, crypto ETNs remain outside mainstream ISA wrappers. They are limited to niche options such as Innovative Finance ISAs, or IFISAs. These are typically offered in relation to peer-to-peer lending and crowdfunding, have limited platform support, and offer no Financial Services Compensation Scheme protection.

Unlike traditional Stocks and Shares ISAs, IFISAs make tax-efficient holding harder. Existing holdings may require transfer or restructuring, and new purchases within wrappers become limited. Some investors may face forced sales, taxable accounts or market timing risks.

The effect is as regulated access tightens, some turn to offshore or unregulated platforms, where protections are weaker and risks higher.

Rather than improving access within a regulated environment, the changes may narrow it further. They make tax-efficient investment harder while leaving unregulated alternatives easier to access.

Protection or Restriction?

The FCA’s consumer protection mandate is necessary, but the framework raises a key question. At what point does protection become restriction?

The regulator says it will continue to monitor market developments and consider its approach to high-risk investments. It adds that any changes to RMMI classification will be reviewed as part of broader crypto regime work.

By keeping access difficult, limiting availability, and adding structural barriers, the UK risks pushing investors toward less regulated environments. This is the outcome the policy aims to prevent.

As recent changes take effect, UK retail access to bitcoin remains constrained, inconsistent, and in many cases out of reach.

The FCA’s mandate is to protect consumers and ensure market integrity. When regulation restricts access to one of the best-performing assets of the decade while pushing investors toward opaque or unregulated alternatives, it undermines both. If the UK is serious about financial innovation, it must confront a growing contradiction. A framework designed to reduce harm may be creating it.

Originally published in Forbes