Kraken CEO slams UK crypto rules, warns of service cuts
Kraken CEO Jesse Powell has sharply criticized the UK crypto rules proposed by the Financial Conduct Authority (FCA), calling anti-money laundering requirements and capital buffers overly burdensome. He warned that Kraken may limit or withdraw key services for UK customers—such as staking, derivatives trading and advanced order types—if the FCA does not simplify its registration process. Powell argued that strict UK crypto rules could drive digital-asset innovation offshore, erode market competitiveness and lead to higher fees for traders. He contrasted the UK’s approach unfavorably with more flexible regimes in the EU and Asia, urging regulators to balance consumer protection with growth. Traders should prepare for potential service disruptions, reduced liquidity and shifts in platform choice as the UK crypto regulation debate unfolds.
Bearish
Powell’s warning that Kraken may limit or suspend services under the new UK crypto rules signals reduced liquidity and fewer trading options for UK customers. Historical precedents—such as South Korea’s 2021 crypto clampdown—show that strict regulation often leads to lower trading volumes and downward price pressure. In the short term, traders may migrate to offshore platforms, decreasing domestic market activity. Over the long term, if the FCA eases requirements, sentiment could recover; however, the current outlook is negative, as uncertainty and service restrictions undermine confidence and trading depth.