Kraken CEO Criticises UK Crypto Rules as “Worse for Consumers”

Kraken co-chief executive Arjun Sethi has sharply criticised the UK’s regulatory approach to crypto asset promotions, describing it as counterproductive for retail investors. In comments to the Financial Times, Sethi likened the risk warnings required on UK crypto platforms to cigarette packaging, saying, “In the UK today, if you go to any crypto website, including Kraken’s, you see the equivalent to a cigarette box [warning] — ‘use this and you’re going to die’.”

Sethi’s remarks come in response to financial promotion rules introduced by the Financial Conduct Authority (FCA) in late 2023. These regulations mandate that crypto firms include prominent risk warnings, eliminate incentives to invest, introduce deliberate transaction ‘frictions’, and conduct “appropriateness assessments” to test whether users understand the risks.

Sethi argues the new regime undermines consumer experience by introducing unnecessary delays and complexity. “Disclosures are important,” he said, “but if there are 14 steps, it’s worse.” He warned that such measures may deter individuals from investing altogether, potentially causing them to miss out on gains available in more open jurisdictions like the US.

The FCA defended its rules, asserting they are designed to ensure consumers make informed choices. “Some consumers may make an informed decision that investing in crypto is not right for them — that is our rules working as intended,” the regulator said.

The UK’s cautious stance stands in contrast to signals from the United States, where recent political shifts have suggested greater receptiveness to the crypto sector. Kraken, which ranks among the top 15 exchanges globally by volume, has restricted access to around 75% of crypto products for UK users compared to its US platform, including decentralised finance tools that allow for yield generation and lending.

Sethi, who also leads venture firm Tribe Capital, confirmed that Kraken has no plans to tokenise private company shares, distancing itself from recent controversies involving platforms like Robinhood.

While Kraken is reportedly preparing for a public listing in New York, no timeline has been disclosed.