The UK's investment landscape is undergoing significant changes as the HMRC reclassification of crypto exchange traded notes (ETNs) takes effect from April. This shift makes it impossible for retail investors to buy crypto ETNs inside their Individual Savings Accounts (ISAs), affecting those who previously used ISAs to invest in digital assets.
HMRC's decision reflects regulatory caution towards the volatility of crypto markets, but critics argue that regulated exchange traded exposure is safer than direct custody of tokens. The reclassification has closed a popular avenue for tax-efficient investing and raises questions about competitiveness and innovation in the UK financial sector.