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 accounts (ISA), according to a Financial Times report on Wednesday.
Stratiphy, a fintech platform that allows users to personalize their investment strategies, offers both crypto-ETNs and Innovative Finance ISAs (IFISAs), which are authorized 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 the 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 United Kingdom’s 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 rendered last year’s decision to lift the ban on retail users accessing crypto-ETNs redundant because no mainstream investment platform offered IFISAs. The few that did had no plans to offer crypto products.
The decision drew criticism from some commentators, who said it risked making Britain an outlier among markets where exchange-traded products (ETPs) have made crypto investments available to a much wider base of retail investors.
Stratiphy will offer access to three ETNs provided by 21Shares: those covering bitcoin ether (ETH) and one that combines BTC and gold.
The London-based investment platform, which opened for business last August, manages £4 million ($5.4 million) for 2,000 retail and corporate clients.
“We see a disproportionately large 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.
