⚠️ Kraken Slams UK Crypto Rules — “Feels Like Cigarette Warnings”

Co-CEO Arjun Sethi says FCA policies cripple user experience, block access to most products, and slow crypto innovation in the UK.

Kraken Co-CEO Arjun Sethi has publicly criticized the UK’s Financial Conduct Authority (FCA) over its strict crypto promotion rules, warning that the framework is slowing transactions, burdening users, and limiting access to core services. His remarks reflect rising tension between crypto exchanges and UK regulators, as firms argue that overly cautious policies are stifling innovation rather than protecting consumers.

🔎 Quick Facts

• 🇬🇧 FCA’s 2023 Financial Promotions Rule introduces mandatory risk warnings + friction steps
• 🚫 Kraken says UK users can’t access over 75% of products available to U.S. clients
• 📉 Sethi compares FCA warnings to “cigarette labels”
• 📺 Coinbase’s UK “Everything Is Fine” ad was banned — cited as overreach example
• 🏦 Regulators also exploring individual stablecoin caps
• 🌍 Kraken recently acquired Small Exchange for $100M, expanding globally

📉 “Feels Like Cigarette Warnings”: Kraken Pushes Back

Speaking with the Financial Times, Sethi said risk disclaimers on UK crypto websites resemble health warnings on tobacco products. He argued that mandatory quizzes and friction steps intended to “protect users” actually degrade the user experience.

The FCA's Financial Promotions Rule, introduced in 2023, forces crypto platforms to:

• display prominent risk warnings
• use “positive frictions” such as questionnaires
• slow onboarding to ensure users understand risks

Sethi says these measures create obstacles without increasing safety.

🚫 UK Users Restricted From 75% of Kraken’s Products

Sethi claims UK users cannot access more than three-quarters of services available to Kraken’s U.S. customers. He argues that the FCA’s approach has “unintended consequences,” stifling innovation and limiting consumer choice.

📺 Coinbase Ad Ban Sparks Industry Outrage

The FCA’s decision to ban Coinbase’s “Everything Is Fine” advertisement intensified debate. Industry leaders saw the move as another indication of overly rigid enforcement targeting crypto firms disproportionately.

🏛️ More Industry Voices Call Out UK Policy

Kraken UK Managing Director Bivu Das also criticized:

• the slow pace of rulemaking
• uncertainty around the Bank of England’s proposed stablecoin caps

Coinbase’s VP of international policy echoed these concerns, noting that no other major crypto jurisdiction imposes the same limitations.

🛡️ Regulators Defend Their Approach

Not everyone agrees with the criticism. Legal experts argue the UK’s framework is intentionally strict to protect financial stability.

Pinsent Masons partner David Heffron said the Bank of England’s proposals show a strong commitment to systemic safety. Norton Rose’s Hannah Meakin called the measures “foundational steps” for global competitiveness.

🌍 Kraken Expands Internationally Despite UK Friction

While criticizing the UK’s regulatory environment, Kraken continues scaling globally. The company recently completed a $100 million acquisition of Small Exchange, a CFTC-licensed Designated Contract Market — strengthening its U.S. derivatives footprint.

🧭 Bigger Picture

The clash between Kraken and the FCA highlights a broader conflict: regulators emphasize consumer protection, while exchanges warn of innovation suffocation.

As Kraken grows internationally, the contrast between UK caution and global expansion becomes even sharper — signaling a widening mismatch between domestic regulation and global crypto market momentum.

✅ TL;DR

• Kraken CEO Arjun Sethi says UK rules slow transactions and block access to 75% of products.
• FCA risk warnings compared to cigarette-box health labels.
• Coinbase ad ban illustrates strict enforcement.
• Regulators defend the rules as essential for financial stability.
• Kraken expands globally despite UK constraints (Small Exchange acquisition).

📚 Read Also

• Bank of England Proposes £20K Stablecoin Holding Caps
• Brian Armstrong: Crypto as Global Economic Freedom
• Cypherpunk Technologies Goes All-In on Zcash
• Zcash Continues Its Privacy-Fueled Breakout