Following approval, UK investors can once again hold cryptocurrency ETNs in a tax-free vehicle through Stratiphy, a fintech startup that allows users to personalize investment strategies. This development comes after Stratiphy received permission to offer these ETNs in a special class of individual savings account (ISA), as reported by the Financial Times.
Stratiphy offers both crypto ETNs and Innovative Finance ISAs (IFISAs), the authorized wrapper for investing in them. ISAs enable users to save up to £20,000 per year without paying income tax or capital gains tax on returns. The UK's tax authority, HMRC, had classified crypto ETNs as instruments only available in IFISAs from the start of the current tax year. This move had essentially made last year's decision to lift the ban on retail users accessing crypto ETNs redundant, as no mainstream investment platform offered IFISAs with crypto products.
Stratiphy will provide access to three ETNs from 21Shares, covering bitcoin, ether, and a combination of BTC and gold. The London-based investment platform, which launched in August last year, manages £4 million for 2,000 retail and corporate clients. According to CEO Daniel Gold, there is a high level of interest in these crypto products, which offer a new asset class with low correlation to other asset classes, making them an interesting way to diversify portfolios.