Arjun Sethi, co-CEO of Kraken, has launched harsh criticism against the United Kingdom’s cryptocurrency regulatory framework for its deterrent effect on retail access to digital assets. According to Sethi, the current rules add operational friction and limit up to 75% of the products available in other jurisdictions, placing the UK at a competitive disadvantage in the fintech sector.
The Kraken executive compared the mandatory warnings on platforms to those on cigarette packs: “use it and you will die“, a metaphor that, he says, creates a psychological barrier for retail investors. He also pointed to complex procedures such as a 14-step transaction process and mandatory suitability checks which, in practice, leave Britons without access to products like DeFi, staking, and lending that are available in the U.S.
Kraken, which according to public data is preparing for a possible IPO in 2026 and strategic corporate moves (acquisition of NinjaTrader and alliance with Mastercard), considers that the lack of regulatory clarity on tokenized assets and stablecoins limits its expansion plans in the UK market.
Impact of British regulations on the crypto ecosystem
Other companies show different responses: Coinbase chose to offer regulated products in the United Kingdom —savings accounts with 3.75% and FSCS protection— while receiving a £4.5 million fine in 2024 for regulatory breaches, illustrating the tension between access and oversight.
A partial market easing came with the removal of the ban on retail ETNs in October 2025; 21 products linked to Bitcoin and Ether were listed on the London Stock Exchange, and the cited projections speak of potential market growth of 20% and that a third of the British population could consider these instruments. However, limitations persist such as the ban on derivatives for retail investors and possible tax effects that, according to HMRC rules, could force sales of ETNs in ISAs from April 2026.
The next relevant milestone is Kraken’s potential IPO in 2026 and the coming into force of tax rules on ETNs in April 2026, events that will measure whether the UK’s crypto rules evolve toward greater clarity and access or maintain the barriers that, according to the industry, hinder retail flows.
