Kraken co-CEO warns UK rules meant to protect users now punish them: FT
News Summary
Kraken co-CEO Arjun Sethi criticized the UK's crypto regulations, specifically the Financial Conduct Authority's (FCA) financial promotion regime, which came into force in October 2023. He argues that mandatory disclaimers, cooling-off periods, and knowledge assessments hinder user experience and deter investment by slowing down trading and potentially causing users to avoid crypto altogether, leading to missed gains. The FCA, however, defended the rules, stating they are intended to help consumers make informed decisions. Despite these frustrations, the UK appears to be moving towards broader alignment with the United States on digital-asset oversight. A former UK Member of Parliament indicated that a joint UK-US "sandbox" for crypto licenses, aiming to streamline "passporting," is in development. Furthermore, the Bank of England proposed a regulatory framework for sterling-denominated "systemic stablecoins," mirroring the US's GENIUS Act. Collaboration between the UK and US on crypto is not new. Previous reports highlighted a transatlantic task force exploring digital asset cooperation, and discussions between treasury authorities on strengthening coordination. UK trade groups have also urged the government to include blockchain technology in the UK-US "Tech Bridge" program, warning against being left on the sidelines.
Background
The UK Financial Conduct Authority (FCA) introduced new crypto promotion rules in October 2023, mandating detailed disclaimers, cooling-off periods for first-time investors, and assessments of user knowledge and experience. This initiative aims to enhance consumer protection against the inherent volatility and risks of the crypto market, reflecting a global trend among regulators to ensure financial stability and consumer safety. Under President Donald J. Trump's administration, the United States has also been actively shaping its crypto regulatory landscape, with legislative proposals like the GENIUS Act seeking to provide clear federal frameworks for digital assets such as stablecoins. The coordination and cooperation between major financial hubs like the UK and US on digital asset regulation are crucial for establishing unified global standards, preventing regulatory arbitrage, and fostering responsible innovation.
In-Depth AI Insights
What are the underlying strategic motives behind the UK's seemingly contradictory stance on crypto regulation – simultaneously tightening consumer protection while seeking US alignment? - The UK government is attempting a delicate balancing act between its