What this means for UK consumers and how to protect yourself from Crypto Investment Fraud
Crypto is beginning to flood back into mainstream news coverage – and this time, the centre of attention is something most ordinary retail investors have had almost no prior experience with: ETNs.
What are ETNs?
ETN stands for Exchanged Traded Note.
An ETN is a type of investment product that you can buy and sell on a stock exchange, just like shares or ETFs (Exchange Traded Funds). However, the distinction is very important:
- ETFs hold the underlying asset (for example Bitcoin) directly.
- ETNs do not hold the asset. It is a debt note issued by a financial institution promising to deliver the return.
This means ETNs add an additional layer of risk. You are exposed not only to crypto price volatility, but also to the issuer’s credit risk. If the issuer fails, collapses, or cannot honour the debt then investors may not get their returns, even if the crypto asset itself has increased in value.
This complexity makes ETNs particularly easy to misunderstand- and vulnerable to exploitation by scammers and unregulated brokers.
Why is there currently a price battle?
Right now, ETN issuers are aggressively fighting for market share. Crypto is expected to reaccelerate ahead of the next Bitcoin cycle, and ETN issuers want to become the default mainstream accessible crypto investment product for retail investors.
To win that position, ETN issuers are:
- Cutting fees: lower fees make the ETN look more attractive to retail buyers and institutions. In crypto, very small fee differences compound massively. Issuers want to become the cheapest option, so investors default to them first.
- Competing on liquidity: liquidity is essentially the ability to transact size (enter or exit) quickly, reliably, at a low cost, without materially moving the price. Issuers want to show the market that they are the easiest to trade, which makes them appear safer and more professional.
- Trying to list on premium regulated exchanges: a London Stock Exchange listing (or other top tier exchanges) instantly increases credibility. Being listed in respected markets makes ETNs appear legitimate, low risk and institutionally approved (even though they are not inherently safer). This is a major marketing power.
- Shortening spreads: the spread is the difference between the buy price and sell price. Shorter spreads imply more efficient price discovery. Issuers want to show that their ETN tracks the real asset price more accurately than others. This is a way to claim technological superiority.
- Building narratives about why their version of exposure is safest: this is pure competition for investor psychology. If they win the “safest version of crypto exposure” narrative in retailer’s minds, they win the majority of assets flowing into the ETN category.
This level of competition creates eye-catching headlines and draws in attention fast.
Headlines create hype; and hype creates the exact psychological environment that scammers exploit.
The FCA Shift:
The Financial Conduct Authority, the UK’s financial regulator, lifted its ban on retails investors buying these ETNs in October 2025, softening its stance against the investments, after previously attempting to shield small investors from volatility and the risk of fraud that typically comes with this type of investment.
This is a major policy pivot. For several years, the FCA kept these products blocked to protect consumers from exactly the type of harm we see repeatedly in crypto scam recovery cases.
This change will now be used by scammers to create perceived legitimacy for their fraudulent schemes.
How this affects UK consumers:
The key point is this: regulatory allowance is not the same as personal safety or suitability.
ETNs are complex. Most retails investors do not fully understand the risk layers involved and fraud operators are undoubtedly already preparing new sales language using this FCA shift as their main credibility anchor.
If you have been approached with anything ETN linked:
Treat it with extreme caution if:
- The returns are guaranteed.
- The communication moves onto WhatsApp/Telegram.
- They reference the FCA change as proof of safety/legitimacy.
- The firm is overseas but claims UK registrations.
If you feel that you have been targeted or already lost funds connected to ETN investments, please reach out to WRS for a free consultation with our First Response Team.