Investors in the UK can once again hold cryptocurrency exchange-traded notes (ETNs) in a tax-free vehicle after fintech startup Stratiphy received approval to offer them in a special class of individual savings account (ISA), according to a Financial Times report on Wednesday.
Stratiphy, a fintech platform that allows users to customize their investment strategies, offers both crypto ETNs and Innovative Finance ISAs (IFISAs), the licensed wrapper for investing in them, the Financial Times reported.
ISAs allow users to save up to £20,000 ($27,000) a year without paying income tax or capital gains tax on returns. The two most common types are cash ISAs, which pay interest, and stocks and shares ISAs, which invest in shares and exchange-traded instruments.
In late February, the UK tax authority, His Majesty’s Revenue and Customs (HMRC), classified crypto ETNs as instruments only available on IFISA from the start of the current financial year on April 6.
This essentially made last year’s decision to lift the ban on retail users accessing crypto ETNs redundant because no mainstream investment platform offered IFISA. The few that did so had no plans to offer crypto products.
The decision drew criticism from some commentators, who said it risked making the UK an outlier among markets where exchange-traded products (ETPs) have made cryptocurrency investing available to a much broader base of retail investors.
Stratiphy will offer access to three ETNs provided by 21Shares: those that cover bitcoin ether (ETH) and one that combines BTC and gold.
The London-based investment platform, which opened in August last year, manages £4 million ($5.4 million) for 2,000 retail and corporate clients.
“We see a disproportionate level of interest in these [crypto] products,” CEO Daniel Gold said, according to the newspaper.
“It’s a really interesting way to diversify your portfolio. It’s a new asset class with low correlation to other asset classes.”
Stratiphy did not immediately respond to CoinDesk’s request for comment.
