In October 2025, the Financial Conduct Authority lifted a long-standing ban, allowing UK retail investors to purchase cryptoasset Exchange Traded Notes (ETNs). Initially, these investments were permitted to be held within a standard Stocks and Shares ISA. However, guidance from HM Revenue & Customs (HMRC) has confirmed that the rules are changing. From 6th April 2026, crypto ETNs will be reclassified, meaning those who wish to hold crypto ETNs within a tax-free wrapper must do so via an Innovative Finance ISA (IFISA).
There were initial concerns that investors might be forced to liquidate their existing holdings if their current Stocks and Shares ISA provider did not offer an IFISA. HM Revenue & Customs has recently clarified its position, providing reassurance to those who have already invested.
What are crypto ETNs?
A crypto Exchange Traded Note (ETN) is a type of financial product that tracks the price of a cryptocurrency, such as Bitcoin or Ethereum. Unlike buying cryptocurrency directly through a digital exchange, an ETN is a debt security traded on a regulated stock market, such as the London Stock Exchange.
Investing in a crypto ETN allows individuals to gain exposure to the price movements of cryptocurrencies without needing to manage a digital wallet or buy the digital coins directly. We explain more about crypto ETNs and how they work in our article 'Crypto ETNs to be available in the UK for the first time'.
What will happen to crypto ETNs currently held in a Stocks and Shares ISA?
According to a statement given to the Financial Times, HMRC confirmed that investors will not be forced to sell or transfer their existing crypto ETNs. Any crypto ETNs purchased and held within a Stocks and Shares ISA before the 6th April 2026 deadline can remain in those accounts. They stated that forcing investors to move or liquidate their assets "could risk some level of market disruption and impose disproportionate operational challenges on ISA managers".
Buying new crypto ETNs from April 2026
While existing investments are protected, the rules for new purchases will change. From 6th April 2026, those wishing to hold new crypto ETNs within a tax-free wrapper must do so via an Innovative Finance ISA. An IFISA is a specific type of tax-free savings account, historically used for peer-to-peer lending. Currently, far fewer providers offer an IFISA compared to the popular Stocks and Shares ISA. Research by the Financial Times has found that no mainstream investment platform currently offers both crypto ETNs and an Innovative Finance ISA.
According to HMRC data, there are currently 57 platforms registered to offer an Innovative Finance ISA. However, these firms mostly focus on alternative investments, such as peer-to-peer lending and crowdfunding, rather than stock market products like ETNs.
According to the Financial Times, at present no major investment platforms have announced plans to launch an Innovative Finance ISA to accommodate the new rules. This means that, in practice, investors may struggle to buy new crypto ETNs within a tax-free wrapper after the April 2026 deadline. Of course, those keen to purchase crypto ETNs going forward can do so via a General Investment Account (GIA); however, you’ll need to consider any capital gains and income tax you could be liable for.
What are the risks of crypto ETNs?
It is important to remember that cryptoassets are highly volatile. They are best suited to experienced investors who understand the risks and accept the possibility of losing their entire investment. For more details, read our article on how cryptocurrency is regulated in the UK. Additionally, investments in crypto ETNs are not protected by the Financial Services Compensation Scheme. This means that if the issuing company fails, you will not be eligible to claim compensation. You should always conduct thorough research to ensure an investment suits your individual circumstances. Alternatively, speak to a financial adviser who can help you to build and manage an investment portfolio that meets your long-term financial goals.
What next for investors?
If you hold or plan to buy crypto ETNs, there are a few practical steps to consider regarding the upcoming changes:
- If you want to buy ETNs now - If you intend to purchase crypto ETNs and want to do so within a Stocks and Shares ISA, you have until 5th April 2026 to do so before the new rules apply to new investments.
- If you want to buy ETNs in the future - Ask your current ISA provider if they offer (or plan to offer) an Innovative Finance ISA in order to accommodate any future crypto ETN investments you may wish to make after the deadline.
- Assess your portfolio - Use this opportunity to ensure your investments still match your long-term goals and that you are comfortable with the level of risk involved.
When investing, your capital is at risk and you may get back less than invested. Past performance doesn’t guarantee future results.
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