The UK Financial Conduct Authority (FCA) has proposed allowing authorized investment funds, including UCITS mutual funds, to allocate up to 10% of their assets to cryptocurrency exchange-traded notes (ETNs). This proposal, outlined in the FCA's 52nd quarterly consultation paper, aims to provide regulated exposure to crypto assets while maintaining investor protection. The 10% cap is designed to prevent these products from being classified as "restricted mass-market investments." The proposal specifies that there will be no cap for funds targeting professional and sophisticated investors, while long-term asset funds and non-UCITS retail funds operating as alternative investment funds will be prohibited from holding crypto ETNs. The consultation period for this proposal will close on July 13th, allowing stakeholders to provide feedback on the potential regulatory changes.