Kraken CEO Slams FCA Crypto Rules for Slowing Trading
In October 2023, the UK’s Financial Conduct Authority (FCA) rolled out new crypto marketing rules that require risk warnings, positive-friction questionnaires, cooling-off periods and knowledge tests before retail trading. Kraken co-CEO Arjun Sethi argues these FCA crypto marketing rules slow trading speed, degrade customer experience and deter investors by blocking access to about 75% of US products, including yield and DeFi offerings. Sethi also confirmed Kraken’s plans for a New York listing, though he gave no timeline. Meanwhile, the UK is pursuing closer alignment with US oversight through a UK-US joint crypto sandbox and a Bank of England consultation on sterling-backed systemic stablecoins. Traders should watch these evolving UK crypto regulations closely, as heightened disclosure requirements and multi-step approvals could disrupt liquidity and market participation.
Bearish
The FCA’s stricter crypto marketing rules introduce additional steps and disclosures that directly hinder trading efficiency and access to a wide range of digital assets. By blocking retail users from 75% of US products and requiring risk warnings, positive-friction questionnaires and cooling-off periods, these regulations are likely to reduce trading volume and market liquidity in the short term, leading to bearish pressure on affected crypto platforms. In the longer term, while a UK-US sandbox and stablecoin consultations may lay groundwork for improved frameworks, the immediate friction and increased compliance burden are likely to deter new and existing traders, sustaining downward pressure on market participation.