Kraken’s co-CEO, Arjun Seth, has openly criticized the United Kingdom’s approach to cryptocurrency regulation, arguing that the Financial Conduct Authority’s (FCA) stringent requirements are hindering transactions and deterring retail investors. The comments were reported by Financial Times.
Seth remarked, “In the UK today, visiting any crypto website, including Kraken, feels like seeing a cigarette pack warning: ‘Use this and you’ll die.’” He added that excessive regulation diminishes the user experience. “Speed is essential in crypto transactions, and the current process only makes it worse. Risk disclosures are important, but having to complete 14 steps is overkill.”
This represents one of the first public critiques of the UK’s crypto promotion framework introduced by the FCA in 2023. Under these rules, cryptocurrency firms must display clear risk warnings, refrain from offering investment incentives, and ensure users pass “appropriateness assessments” before accessing certain products. Additionally, the regulator introduced “positive barriers” to slow down purchases so that users can fully understand the potential consequences of their actions.
According to Seth, these measures have restricted UK Kraken users from accessing around 75% of products available to US customers, including yield-generating services and participation in DeFi protocols.
The FCA, however, maintains that its rules are designed to protect investors rather than impede transactions. “Clients must answer questions before a company can make financial offers to them, but this is not required for every trade, so it generally doesn’t obstruct their activities. Some consumers may decide crypto investments aren’t suitable for them—and that’s exactly the intended outcome of our rules,” a representative said.
The UK regulator has frequently faced criticism for its cautious approach to the crypto market, especially compared to the more flexible stance in the United States under former President Donald Trump. Last month, the FCA filed a lawsuit against HTX, a crypto exchange linked to billionaire Justin Sun, for violating financial promotion rules.
Starting January 1, 2026, new regulations will require crypto firms to report each user and transaction to tax authorities. Meanwhile, the Bank of England and FCA are preparing a new regulatory framework, including rules for stablecoins, expected to take effect in 2026. Regulators have signaled plans to relax restrictions for businesses and exchanges, acknowledging that overly strict limits can stifle innovation.
