Following approval, UK investors can once again invest in cryptocurrency exchange-traded notes (ETNs) through a tax-free vehicle, after Stratiphy, a fintech startup, received the green light to offer them within a special class of individual savings account (ISA). Stratiphy, which allows users to personalize their investment strategies, is providing both crypto ETNs and Innovative Finance ISAs (IFISAs), as reported by the Financial Times. ISAs enable users to save up to £20,000 annually without incurring income tax or capital gains tax on returns.
At the end of February, the UK's tax authority, HMRC, reclassified crypto ETNs as instruments only available in IFISAs from the start of the current tax year. This move rendered 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.
However, Stratiphy will now offer access to three ETNs from 21Shares, covering bitcoin, ether, and a combination of BTC and gold. With £4 million in assets under management for 2,000 clients, Stratiphy's CEO, Daniel Gold, noted that there is a 'disproportionate level of interest' in these crypto products, which can provide a unique way to diversify portfolios with low correlation to other asset classes.