'Use this and you're going to die' — Kraken co-CEO slams cigarette box-style UK crypto promotion rules as overly restrictive: FT

Kraken co-CEO Arjun Sethi has criticized the UK's crypto marketing regime, arguing that strict promotion rules introduced by the Financial Conduct Authority have made it harder for consumers to use and benefit from digital assets.

"In the UK today, if you go to any crypto website, including Kraken's, you see the equivalent to a cigarette box [warning] — 'use this and you're going to die,'" Sethi told the Financial Times. He added that excessive procedural hurdles slow users down, saying, "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."

The FCA's financial promotion regime, implemented in October 2023, requires all firms marketing crypto services in the UK to include prominent risk warnings, ban investment incentives, and introduce so-called "positive frictions" such as questionnaires to assess user knowledge before they invest.

Sethi said these requirements can deter some customers from engaging with crypto altogether, potentially causing them to miss out on market opportunities.

In response, the FCA defended the framework, saying it ensures customers understand the benefits and risks of crypto investing. "Customers must answer questions before a firm makes a financial promotion to them, but this is not required every time a customer makes a trade," the regulator told the outlet. "Some consumers may make an informed decision that investing in crypto is not right for them — that is our rules working as intended."

The FCA has faced repeated criticism from industry executives for being overly cautious. Last month, it sued the exchange HTX — linked to entrepreneur Justin Sun — for allegedly breaching the promotion rules.

The UK's stance also contrasts with the United States, where regulators under the Trump administration have moved toward a more permissive approach to digital assets.

Sethi said tighter restrictions mean Kraken's UK users cannot access about 75% of the products available in the U.S., including yield-bearing and decentralized finance offerings. He also confirmed that Kraken is preparing for a public listing in New York, though he declined to comment on timing.

'UK can do better'

Last month, Kraken's UK managing director Bivu Das called on regulators to "move faster" on stablecoin and tokenization frameworks, warning that the country risked falling behind competing jurisdictions.

Speaking to The Block at Zebu Live in London, Das said the UK "can do better," describing regulators' outcome-based approach as the right one but needing greater urgency to support innovation.

Das highlighted Kraken's EU rollout of xStocks tokenized equities in partnership with Backed as one such innovation not yet available in the UK due to regulatory hurdles — a product he said was already attracting strong inflows elsewhere.

Despite these frictions, Das said the UK remains Kraken's second-largest market globally, with the company continuing to expand its local offerings, including a neobank-style app called Krak with upcoming debit cards and stablecoin yield features, as it awaits clearer regulatory guardrails for new products.