Stratiphy opens tax-free access to crypto ETNs for UK investors

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UK tax-free crypto ETNs

Highlights

Stratiphy received approval to offer cryptocurrency ETNs through Innovative Finance ISAs, allowing UK investors to hold crypto ETNs tax-free within £20,000 annual limits.
From April 6, HMRC classifies crypto ETNs as available only via Innovative Finance ISAs, limiting retail access mainly to platforms like Stratiphy that provide the required wrapper.
Stratiphy's platform includes three 21Shares ETNs—bitcoin, ether, and BTC/gold combo—and currently manages £4 million for 2,000 clients, with outsized interest in crypto products.

ISA structure enables crypto ETN access

As first reported by the Financial Times, London-based fintech Stratiphy has received approval to offer cryptocurrency exchange-traded notes through a special class of individual savings account, allowing eligible investors to hold the products without paying income tax or capital gains tax on returns within annual ISA limits.

ISAs let savers invest up to 20,000 pounds a year tax-free, with cash ISAs and stocks and shares ISAs remaining the most widely used formats. At the end of February, His Majesty's Revenue and Customs classifies crypto ETNs as instruments available only through Innovative Finance ISAs from April 6, effectively narrowing access to platforms able to provide that wrapper.

Stratiphy offers both the crypto ETNs and the IFISA structure needed to hold them. The platform says the range includes three ETNs from 21Shares, covering bitcoin, ether and a product that combines BTC and gold.

Market implications for UK retail investing

The regulatory setup had made last year's decision to lift the ban on retail access to crypto ETNs largely ineffective because mainstream investment platforms did not offer IFISAs, while the few that did were not planning crypto products. That prompted criticism that the UK risked falling behind markets where exchange-traded crypto products have broadened retail participation.

Stratiphy, which opened in August last year, manages 4 million pounds for 2,000 retail and corporate clients. Chief executive Daniel Gold tells the newspaper that interest in the crypto products is disproportionately high, describing them as a diversification tool and a new asset class with low correlation to others.

In our earlier article, we explained how recent HMRC tax rule changes effectively restricted new retail purchases of crypto exchange-traded notes (ETNs) to Innovative Finance ISAs, limiting practical access despite the market reopening. We noted that Stratiphy aimed to fill this gap by offering an IFISA wrapper alongside 21Shares ETNs tracking bitcoin, ether and a bitcoin-gold mix.

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