Kraken Boss Criticizes UK Crypto Rules for Slowing Retail Growth

Highlights:

• Kraken boss criticizes UK crypto rules, calling them restrictive and harmful to retail investors.
• Arjun Sethi says UK regulations block access to 75% of available crypto products.
• The UK faces growing pressure to match the global crypto innovation pace.

The co-chief executive of cryptocurrency exchange Kraken has criticized UK crypto rules, saying they are impeding digital innovation and retail involvement. Kraken co-CEO, Arjun Sethi, told the Financial Times that promotional regulations in the UK deter users and slow down transactions. He compared the warnings needed on crypto sites to those on cigarette boxes, which drive the users away by creating unnecessary hurdles.

Sethi stated that retail traders go through 14 procedures before making a single transaction. According to him, these delays expose investors to losses in the market, particularly at the time of fluctuating prices. He added, “Disclosures are fine, yet taking too many steps leads to trouble.”

The remarks by Sethi are the first direct criticisms of the regulations from the UK Financial Conduct Authority (FCA), which came into effect at the end of 2023. The FCA requests crypto companies to publish risk warnings, prohibit incentives to invest, and conduct knowledge tests on users.

According to FT, Kraken co-CEO Arjun Sethi criticized the UK’s strict crypto regulations for hindering capital flows and hurting user experience. He said UK users are blocked from about 75% of crypto products, including DeFi staking and lending. Sethi also said Kraken won’t offer…

— Wu Blockchain (@WuBlockchain) November 12, 2025

Rules Meant to Protect, But Industry Sees Roadblocks

According to the FCA, the rules should be used to make sure that consumers know the risks associated with crypto before investing. However, the industry feels that the measures have gone too far. Sethi stated that this restrictive set of rules deprives UK-based users of most products available abroad. He estimated that Kraken British users are denied almost three-quarters of the products offered to Americans, including decentralized financial tools and yield-generating offerings.

Sethi also added that UK crypto regulations are harming competitiveness and lowering innovation. As the US, Singapore, and Hong Kong proceed with enabling policies, the British stance has frustrated global corporations. In August, the former Chancellor George Osborne also cautioned that the UK would be left behind in the global crypto competition.

Former UK Chancellor George Osborne has criticized the Labour government's cautious stance on crypto, warning that Britain is falling behind the US, EU, and Asia. He likened the current crypto shift to the 1980s “Big Bang” financial reforms, urging swift action to avoid missing a…

— Wu Blockchain (@WuBlockchain) August 4, 2025

In response, the FCA claimed that informed caution is working as expected. They added that customers “need to answer questions before being given promotions,” but not all trades. However, Sethi argued that real-time trading requires speed and that additional steps were detrimental to the consumer rather than beneficial.

Broader Moves in the UK’s Digital Asset Landscape

Kraken, established in 2011, is among the 15 largest exchanges in terms of trading volume. The company is still growing under the leadership of Sethi despite the varying regulatory conditions. In addition, the company has IPO plans on the cards, where Citigroup and Goldman Sachs are reportedly leading the listing process.

Earlier this year, Kraken purchased derivatives platform NinjaTrader at a valuation of $1.5 billion to expand its offering into futures and options. It also introduced xStocks in Europe, offering tokenized versions of major US stocks such as Apple, Tesla, and Nvidia.

Meanwhile, the UK regulators are working on new regulations for stablecoins and digital payments. The Bank of England has recently outlined a 2026 roadmap for regulating sterling-backed stablecoins. The plan requires that issuers maintain 40% reserves in the central bank and 60% in the short-term UK government debt. The bank furthermore claimed the move strikes a balance between innovation and stability alongside public trust.