Arjun Sethi, co-CEO of Kraken, criticizes the excessive and stifling crypto regulation in the UK, which he believes hinders innovation. He compares the imposed warnings to cigarette packs, which deter users.
Crypto Restrictions Resemble Cigarette Warnings
Arjun Sethi, co-CEO of Kraken, directly confronts the regulations imposed by the UK on the promotion of digital assets. According to him, these restrictions inhibit innovation, block users, and create an anxiety-ridden environment around crypto.
Today, in the UK, every crypto site displays the equivalent of a warning on a cigarette pack: ‘use this and you will die.’
For him, these alarmist messages do not help consumers at all. Even worse: the complexity of the processes penalizes them.
British investors now have to go through up to fourteen steps before they can buy a simple token. Between forms, knowledge tests, and lengthy warnings, transactions take a lot of time. ‘Disclosures are important, but too much friction kills the experience,’ summarizes the executive.
Crippling Regulation Eliminates Three Quarters of the Market
Since the new rules of the Financial Conduct Authority (FCA) came into effect at the end of 2023, platforms must display detailed warnings, ban incentive promotions, and verify each user’s understanding of risks. As a result, according to Sethi, Britons have lost access to nearly 75% of crypto products available in the United States.
On Kraken UK, it is impossible to access certain DeFi returns or standard lending programs found across the Atlantic. This differential treatment, according to him, hinders the competitiveness of the British market and drives investors towards more open jurisdictions.
FCA Remains Inflexible
On the regulator’s side, the FCA defends its approach. The FCA states that these rules ensure a better understanding of risks and does not hide its bias:
Some consumers will decide that crypto is not for them, and that’s exactly what we want.
This discourse is hard to swallow for an industry that sees these measures as a barrier more political than protective.
While London tightens the screws, Washington does the opposite. Under the Trump administration, the signals sent to the crypto sector are much more favorable, and several leaders are already calling on the UK to rethink its approach.
Kraken Turns to Wall Street
Despite these headwinds, Kraken continues to expand its ambitions. The platform, founded in 2011 and ranked among the top 15 global exchanges, is quietly preparing for its IPO in New York.
Simultaneously, the company is developing its tokenized stock exchange, allowing the trading of digital versions of listed stocks. Unlike Robinhood, Sethi rules out integrating shares of private companies like OpenAI: ‘It’s a terrible idea: investors could end up stranded without liquidity.’
