The co-CEO of major cryptocurrency exchange Kraken, Arjun Sethi, criticized the UK's cryptocurrency regulations, stating that these rules hinder their ability to serve customers.
In an interview with the Financial Times, Sethi said, "In the UK, when you visit any cryptocurrency website, including Kraken, you will see warnings similar to those on cigarette packaging." He believes these disclaimers have a significant impact on the customer experience.
Sethi pointed out that these disclosures slow down user operations. Since speed is crucial in cryptocurrency trading, he thinks this is even more detrimental to customers. He concluded, "Disclosures are important […] but if there are 14 steps, that’s even worse."
The updated financial promotion regime by the UK's Financial Conduct Authority (FCA) came into effect in October 2023. The new rules introduce a "cooling-off period" for first-time cryptocurrency investors and require businesses to assess whether users have sufficient knowledge and experience before allowing them to trade.
Sethi believes these rules may lead customers to completely avoid cryptocurrency investments, thus missing out on potential gains. The FCA stated, "Some consumers may make informed decisions, believing that investing in cryptocurrency is not suitable for them — this is precisely the effect our rules are intended to achieve."
Despite dissatisfaction in the industry towards the FCA, the UK seems to be moving towards broader alignment with the US on digital asset regulation.
Former UK MP and founder of the UK-US Crypto Alliance, Lisa Cameron, expressed her belief that a joint "sandbox" mechanism is being prepared between the UK and the US to achieve consistency in the two countries' crypto markets.
She reached this conclusion after discussions with US senators and regulators, and she anticipates that the sandbox aims to address issues related to mutual recognition of licenses, thereby achieving mutual recognition of crypto licenses between the UK and the US.
On Monday, the Bank of England released a consultation document proposing a regulatory framework for stablecoins. The new legislation focuses on systemically important stablecoins that are denominated in pounds and widely used in payment scenarios, similar to the relevant content in the US GENIUS (related legislation).
Reports indicate that in September, the US and UK Treasury departments established a transatlantic working group to explore "short- to medium-term cooperation in the digital asset space." In the same month, UK Chancellor Rachel Reeves discussed strengthening coordination between the two countries in the crypto field with US Treasury Secretary Scott Bessent.
In September, the UK industry association urged the government to include blockchain technology in the "Tech Bridge" technology project in collaboration with the US, emphasizing the importance of digital assets. The organization's joint letter warned that "excluding digital assets from the UK-US Tech Bridge would be a missed opportunity" and that doing so "could potentially marginalize the UK."
Related: Bank of England Deputy Governor Breeden warns: Easing stablecoin regulations could jeopardize financial stability
Original: “Financial Times: Kraken Co-CEO Warns UK User Protection New Rules Become a Constraint”
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