Arjun Sethi, co-CEO of crypto exchange Kraken, has taken aim at the United Kingdom’s regulatory approach to digital assets, arguing that the Financial Conduct Authority’s (FCA) rules are stifling user experience instead of protecting investors.
In an interview with The Financial Times, Sethi compared the required disclaimers on crypto platforms to health warnings on cigarette boxes, saying that the excessive cautionary language does little to help users make informed choices.
“Disclosures are important,” he said, “but if there are 14 steps, it’s worse.”
Excessive disclaimers slow user experience
Sethi warned that the FCA’s new regime could push potential investors away altogether, not because of risk aversion but because of regulatory fatigue. The added layers of warnings and confirmation steps, he said, make the process unnecessarily slow, a poor fit for a fast-moving market like crypto.
That slowdown, he argued, may lead users to avoid crypto entirely, missing out on potential gains.
The FCA responded that this outcome is intentional, saying that if some consumers conclude crypto isn’t right for them after reviewing the risks,
“that is our rules working as intended.”
Sethi’s frustration centers on how these rules slow users down, particularly in fast-paced trading environments where speed and accessibility are critical.
“In the UK today, if you go to any crypto website, including Kraken’s, you see the equivalent to a cigarette box,” he said.
The burden of regulation
The FCA’s updated financial promotion regime, which took effect in October 2023, introduced stricter measures aimed at consumer protection. Among them is a mandatory “cooling-off” period for first-time crypto investors and knowledge checks to assess whether users understand the risks before trading.
While these steps are meant to prevent reckless investing, critics like Sethi argue that the approach overcorrects. The friction added by multi-step confirmations and extensive warnings could discourage participation altogether, potentially locking out responsible investors who simply want to engage with the market efficiently.
The FCA maintains that its framework is doing what it was designed to do, ensuring that consumers make informed decisions, even if that means some ultimately decide against investing in crypto.
A slow thaw in the UK’s crypto climate
Despite ongoing tension between exchanges and regulators, the UK appears to be cautiously opening the door to digital assets. Policymakers have been working to align the country’s oversight framework with that of the United States.
Lisa Cameron, a former member of Parliament and founder of the UK-US Crypto Alliance, revealed that a joint “sandbox” initiative between the UK and US is in development.
In parallel, the Bank of England has taken a more structural approach. In November, it released a consultation paper outlining a proposed framework for regulating stablecoins, particularly sterling-backed “systemic stablecoins” used in large-scale payments.
The proposal mirrors developments in the United States, where lawmakers have been advancing the GENIUS Act to formalize oversight of stablecoin issuers. By aligning its policy direction with Washington, the UK appears to be positioning itself within a coordinated transatlantic effort to standardize digital asset regulation.
The goal is to harmonize regulations and create a framework that supports “passporting” between jurisdictions, allowing crypto firms licensed in one country to operate in the other with fewer barriers.
Looking across the Atlantic
The UK’s shift toward regulatory cooperation with the US has been gaining traction throughout 2024. Treasury officials from both nations have established a transatlantic task force to explore short and medium-term collaboration on digital assets.
UK Chancellor Rachel Reeves and US Treasury Secretary Scott Bessent have also discussed expanding this cooperation through initiatives such as the “Tech Bridge,” a program intended to deepen technological partnerships.
Industry groups have urged that digital assets and blockchain technology be explicitly included in this collaboration. Excluding crypto, they warned, would be “a missed opportunity” that risks leaving Britain behind in one of the fastest-evolving areas of finance.
Jordan V.
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