FCA Proposes 10% Cap on Crypto Exposure for Retail Funds

The UK Financial Conduct Authority (FCA) has proposed a new rule that would limit the exposure of retail investment funds to cryptocurrencies. The proposal, which is part of the FCA's efforts to modernize its framework for crypto products, would allow authorized funds to hold up to 10% of their assets in crypto exchange-traded notes (ETNs).

The move aims to balance investor access with regulatory safeguards and prevent potential risks associated with high-stakes investments. According to the FCA, unregulated and qualified investor schemes may invest more aggressively in crypto or other speculative assets, but such products cannot be marketed to retail investors.