UK investors can once again hold cryptocurrency exchange-traded notes (ETNs) in a tax-free vehicle after fintech startup Stratiphy received approval to offer them in the form of a special category of individual savings accounts (ISAs), the Financial Times reported on Wednesday.
According to the Financial Times, Stratiphy, a fintech platform that allows users to personalize investment strategies, offers cryptocurrency ETNs and an Innovative Financial ISA (IFISA), a wrapper authorized to invest in them.
ISAs allow users to save up to £20,000 ($27,000) a year without paying income tax or capital gains tax. The two most common types are Cash ISAs, which pay interest, and Stocks and Shares ISAs, which invest in stocks and exchange-traded instruments.
At the end of February, UK tax authority HM Revenue and Customs (HMRC) classified cryptocurrency ETNs as instruments available only in IFISA from the start of the tax year on April 6.
This essentially makes last year’s decision to lift the ban on retail users accessing cryptocurrency ETNs redundant, as no mainstream investment platform offers IFISA. The few companies that do have no plans to offer crypto products.
The decision drew criticism from some commentators who said it could make the UK an outlier in a market where exchange-traded products (ETPs) offer cryptocurrency investments to a wider range of retail investors.
Stratiphy will provide access to three ETNs offered by 21Shares: ETNs covering Bitcoin Ethereum (ETH), and a combination of BTC and gold.
The London-based investment platform opened last August and manages £4 million ($5.4 million) of funds for 2,000 retail and corporate clients.
“We’re seeing a disproportionate amount of interest in these [crypto] CEO Daniel Gold said, according to the newspaper.
“It’s a very interesting way to diversify a portfolio. It’s a new asset class that has low correlation to other asset classes.”
Stratiphy did not immediately respond to CoinDesk’s request for comment.
