Kraken’s Arjun Sethi Torches UK Crypto Regulations: ’Innovation-Stifling Barriers Must Go’
Kraken co-CEO Arjun Sethi has launched a scathing critique of Britain's cryptocurrency framework, calling current rules 'outdated shackles' on blockchain progress.
The exchange executive argues that excessive compliance demands are driving crypto talent and capital to more hospitable jurisdictions—while UK regulators cling to legacy finance mentalities.
'When you regulate like it's 1999, you get left behind,' Sethi remarked during a London fintech summit, drawing applause from industry attendees.
The comments come as multiple crypto firms scale back UK operations, citing regulatory fatigue. Meanwhile, Singapore and Dubai roll out crypto-friendly policies with clear rulebooks.
One Treasury insider countered: 'We're protecting consumers, not chasing crypto fads.' Because nothing safeguards investors like driving innovation offshore—said no successful economy ever.
Regulatory hurdles in the UK
At the end of 2023, the Financial Conduct Authority (FCA) introduced new rules for crypto companies. They now have to clearly warn users about risks, stop offering incentives to invest, and make sure people actually understand what they’re buying.
Some experts say these rules are too strict and slow down the market. Bill Hughes, a Senior Advisor at Consensys, highlighted that the UK’s approach has slowed the sector and allowed the US to become a more attractive crypto hub. “While in the US there is a real desire to give blockchain technology room to breathe, the tone in the UK is very different, focusing on risks and uncertainties,” Hughes said during the Zebu Live event in London.
The FCA defended its stance, noting that questions about crypto investments are meant to ensure informed decision-making. “Some consumers may make an informed decision that investing in crypto is not right for them — that is our rules working as intended,” the regulator said. However, executives at Zebu Live in London warned that overly cautious policies risk pushing companies abroad.
Shifts in UK crypto infrastructure
Despite criticism, the UK is slowly modernizing its crypto framework. The FCA recently approved London-based ClearToken to launch CT Settle, a regulated settlement service for digital assets. The system is designed to make trading safer and quicker by letting institutions settle crypto, stablecoins, and traditional money all at once.
Additionally, the Bank of England now allows stablecoin companies to invest up to 60% of their backing in government bonds, relaxing earlier limits that slowed growth. However, caps on individual and business holdings remain, with limits of £20,000 for individuals and £10 million for companies.
Global investment firms are also increasing access to crypto in the UK. BlackRock recently launched its iShares Bitcoin ETF on the London Stock Exchange, letting everyday investors buy Bitcoin safely through a regulated platform.
Jane Sloan, BlackRock’s EMEA head, said, “Built on institutional-grade infrastructure, [the product] enables UK investors to gain exposure to bitcoin with the confidence of robust custody and regulatory oversight.” Hence, institutional entry may help balance regulatory caution with market demand.
The UK’s crypto rules try to keep investors safe, but they might slow down new ideas and opportunities. Finding the right balance will decide if Britain stays competitive in crypto.
Also Read: Transak Acquires MTLs in 10 U.S. States for Stablecoin Compliance
