The UK Financial Conduct Authority is weighing a targeted opening for retail investors to gain exposure to crypto via regulated funds. In a quarterly consultation paper published on Friday, the FCA proposed allowing a subset of authorized investment funds to hold up to 10% of crypto exchange-traded notes, narrowing a regulatory gap between retail access and fund strategies. The plan would extend to retail-focused funds known as UCITS, as well as some non-UCITS vehicles, subject to the cap and risk safeguards.

The regulator stressed that the aim is to keep retail participation aligned with investors’ expectations while protecting consumers and maintaining orderly markets. The move follows the FCA’s decision last August to lift the ban…