UK investors can once again benefit from tax-free cryptocurrency investments through a special type of individual savings account (ISA) after Stratiphy, a fintech startup, received approval to offer them. According to the Financial Times, Stratiphy will provide access to three exchange-traded notes (ETNs) from 21Shares, covering bitcoin, ether, and a combination of BTC and gold. This development allows investors to hold cryptocurrency ETNs in a tax-free vehicle, following a report that Stratiphy had received the necessary approval.
The company, which enables users to personalize their investment strategies, will offer both crypto ETNs and Innovative Finance ISAs (IFISAs), the authorized wrapper for these investments. ISAs permit users to save up to £20,000 per year without incurring income tax or capital gains tax on the returns. The UK's tax authority, His Majesty's Revenue and Customs (HMRC), had previously classified crypto ETNs as instruments only available in IFISAs from the start of the current tax year. This move had made the previous decision to lift the ban on retail users accessing crypto ETNs redundant, as no mainstream investment platform offered IFISAs with crypto products.
Stratiphy, which manages £4 million for 2,000 retail and corporate clients, will provide access to the three ETNs. The company's CEO, Daniel Gold, noted that there is a disproportionate 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.