Kraken co-CEO Arjun Sethi argues that the U.K’s rules on the promotion of virtual assets is hurting the consumer experience and may deter potential users from investing in crypto.
Summary
- Kraken co-CEO Arjun Sethi criticized the U.K financial regulators’ strict rules on crypto promotion, warning that excessive disclosure could deter user interest from investing in crypto entirely.
- The exchange ruled out offering tokenized private company shares, with Sethi calling the idea “terrible” and declining to comment on potential IPO plans.
According to a report by the Financial Times, Kraken co-CEO Arjun Sethi warned that the U.K financial regulators’ cautious approach towards crypto trading could slow down adoption. He commented that the U.K’s strict rules on promoting crypto services may end up hindering capital flows and deterring potential users from dipping their toes into the market.
The co-CEO said that U.K users are met with a dire warning when they open a crypto-related website, including Kraken. Sethi likened the pop-up to the sort of message found attached to cigarette boxes that advise consumers on the potential risks related to it, with him stating ” ‘use this and you’re going to die.”
“Because of the speed at which they have to do the transaction, it’s worse for consumers. Disclosures are important . . . but if there are 14 steps, it’s worse,” said Sethi in and interview with the media, marking the first time a crypto official has spoken out against the financial promotion rules for crypto services introduced by the Financial Conduct Authority in 2023.
Moreover, he also said that the U.K’s strict crypto rules are barring users from accessing about 75% of the entire suite of crypto products, including DeFi staking and lending. This is due to the FCA’s rule that prohibits trading incentives.
The FCA’s rules require companies that promote crypto services in the U.K to post clear risk warnings on all their websites and apps, create “positive frictions” between firms and ask users to fill out assessments to prove whether or not they understand the risks related to trading crypto. They also ban companies from providing incentives for investors.
Sethi said that these extra precautions could potentially deter customers from investing in crypto entirely, which would make them miss out on potential gains.
The FCA responded to the criticism by saying the rules are necessary to make sure that customers are aware of the both the benefits and risks related to investing in crypto. Though, the agency noted that customers must answer questions before they see a promotion from a crypto firm, it is not always required every time customers make a trade.
“Some consumers may make an informed decision that investing in crypto is not right for them that is our rules working as intended,” said the U.K FCA.
U.K financial regulators have been known for their cautious stance against crypto, especially when compared to the pro-crypto regulations in the U.S. Just last month, the FCA sued the Justin Sun-linked crypto exchange HTX for allegedly failing to comply with the region’s financial promotion rules.
Kraken’s next steps in the near future
Kraken co-CEO Arjun Sethi said in his interview with Financial Times that the crypto firm will not be offering tokenized shares of private companies. He specifically referred to its competitor, Robinhood’s decision to offer shares in OpenAI. The decision had faced backlash on the market earlier this year, with OpenAI denying any involvement with the tokens promoted on the platform.
Sethi said that the argument used by Robinhood chief Vlad Tenev is “flawed” and that he believed tokenizing private company stocks is a “terrible idea” because investors would have a hard time selling their investments.
When asked about Kraken’s plans to initiate an IPO sometime next year, Sethi declined to comment or give details about the exact schedule.
Since March 2025, Kraken has been granted an Electronic Money Institution license from the UK’s Financial Conduct Authority. The license would allow the crypto exchange to issue electronic money and facilitate faster deposits and withdrawals for U.K customers.
Not only that, the license would also allow the exchange to establish partnerships with local financial institutions and introduce new products targeting U.K users. At the time, Kraken’s U.K General Manager Bivu Das said that the U.K was on “the brink of mass crypto adoption” and that the exchange was prepared to pave the way.