Arjun Sethi, co-CEO of Kraken, has sharply criticized the United Kingdom’s regulatory approach to the crypto market, arguing that new Financial Conduct Authority (FCA) requirements are slowing down transactions and discouraging retail investors, according to a report by the Financial Times . “In Britain today, if you go to any cryptocurrency site—particularly Kraken—you’ll see the equivalent of a cigarette pack warning: ‘Use this and you’ll die,’” Sethi said. He added that excessive oversight is making crypto use unnecessarily complex. “The speed at which users must complete transactions only makes the situation worse. Disclosing the risks is important but having to go through 14 steps is even worse.” Rules That Slow Growth, Not Risk Sethi’s comments mark the first major pushback from an exchange executive since the FCA’s crypto promotion regime came into force in 2023. The rules require crypto companies to: Display clear risk warnings Ban investment incentives Conduct appropriateness assessments of users The FCA also introduced “positive friction” measures — deliberate steps meant to slow down transactions so investors can reflect before purchasing. However, Sethi argues that these measures restrict Kraken’s UK users from accessing about 75% of the products available to its U.S. customers, including yield services and DeFi participation. An FCA spokesperson defended the policy, stating that the rules protect consumers rather than block transactions. “Clients must answer this question before a company can make them a financial offer, but this isn’t required every time they trade,” the FCA said. “Some consumers may decide that investing in crypto isn’t suitable for them — and that means our rules are working as intended.” New Crypto and Stablecoin Rules Ahead The UK regulator has long been accused of over-caution, especially compared to the U.S. under President Donald Trump, which has taken a more open stance on digital assets. Last month, the FCA filed a lawsuit against HTX, the crypto exchange linked to billionaire Justin Sun, alleging violations of financial promotion rules. Starting January 1, 2026, crypto firms in the UK will also be required to report all transactions and user activity to tax authorities. At the same time, the Bank of England and the FCA are preparing a new regulatory framework for stablecoins, expected to launch later in 2026. Regulators have reportedly agreed to ease certain restrictions on exchanges and fintechs, acknowledging that overly strict controls could stifle innovation.
