Investors in the UK can once again hold cryptocurrency exchange-traded notes (ETNs) in a tax-exempt vehicle after fintech startup Stratiphy received permission 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 wrapper allowed to invest in them, the FT reported.
ISAs allow users to save up to 20,000 pounds ($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 shares ISAs, which invest in stocks 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 in IFISAs from the start of the current tax year on April 6.
This essentially made last year’s decision to lift the ban on retail users accessing crypto ETNs redundant, as no traditional investment platforms offered IFISA. The few who did so did not intend 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 crypto investing accessible to a much broader base of retail investors.
Stratiphy will offer access to three ETNs provided by 21Shares: those covering bitcoin ether (ETH) and one combining BTC and gold.
The London-based investment platform, which opened in August last year, manages 4 million pounds ($5.4 million) for 2,000 individual and corporate clients.
“We are seeing 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.
