Why the SEC Paused on Its Innovation Exemption for Tokenization: Bits + Bips
Citadel and SIFMA lobbied to slow tokenized equity rules. Arjun Sethi calls it 'corporate plumbing.' Chris Perkins calls it a bond future moment.
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Kraken has spent $2.75 billion on acquisitions in the past year, and co-CEO Arjun Sethi says the point is not a bigger exchange. The goal is a 24/7 global operating system for capital markets: spot, derivatives, payments, tokenized equities, and custody under one regulatory stack.
Sethi makes the case for each move, from REAP's tripling revenue in emerging markets to Bitnomial's CFTC trifecta, and says what will actually drive Kraken's next three years is not trading volume.
The conversation then turns to the SEC's paused innovation exemption for tokenized equities, why Citadel and SIFMA showed up to lobby against it, and whether direct listings on crypto rails could eventually replace Wall Street's IPO machine.
The episode closes on a question nobody saw coming: what Pope Leo's first encyclical on AI and finance has to do with the Bitcoin white paper.
Hosts:
Austin Campbell (@austincampbell) — Founder, Zero Knowledge Consulting; Adjunct Professor, NYU Stern
Ram Ahluwalia, Co-Host, CEO of Lumida
Chris Perkins, Co-Host, CEO of 250 Digital Asset Management
Guest:
Arjun Sethi - Co-CEO of Kraken / Payward and Chairman of Tribe Capital
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How Kraken Plans to Dominate Tokenization and Perps in 2026 and Beyond - Ep. 932
As crypto markets mature, Kraken is transforming from a trading venue into a multi-asset infrastructure platform.
Co-CEO Arjun Sethi joins to break down the exchange’s expansive strategy: building a vertically integrated derivatives business, pioneering tokenized equities with xStocks, and launching a purpose-built layer 2 chain, Ink, to bridge regulated finance and open DeFi.
Sethi also explains how Kraken responded to the Black Friday crash, the firm’s ADL and margin policies, and what Kraken wants from U.S. policymakers in 2025. Plus: how Kraken's acquisitions of NinjaTrader and Small Exchange could reshape U.S. derivatives, and why this time, tokenization may finally deliver.
Thank you to our sponsors!
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Guest:
Arjun Sethi, Co-CEO of Kraken
Timestamps:
👍 0:00 Intro
⚡️ 0:15 Kraken’s experience on “Black Friday” and how the team handled the chaos
👥 3:52 Why Kraken uses a co-CEO model and how it works in practice
🧩 7:50 How Arjun and his team kept calm and supported the broader ecosystem during the crash
📈 9:25 What the derivatives boom means for Kraken’s long-term strategy
🛡️ 14:55 Why customer trust and fair risk management are core to Kraken’s DNA
🏛️ 20:26 How the Small Exchange and NinjaTrader deals fit into Kraken’s U.S. expansion plan
🔗 31:44 Why tokenization is finally real this time and how Kraken plans to lead it
⚖️ 53:24 What Kraken hopes to achieve in Washington and what’s next for the company
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Kraken’s 10 Year Plan With Arjun Sethi
Gm! In this episode, Arjun Sethi, Co-CEO of Kraken, joins Yano to dive into how his background in tech, growth and IPOs makes him the perfect candidate to join Kraken and take the company to the next level. Arjun dives into how his compensation plan and overall approach to Kraken paves the way for a decade long growth trajectory that will take Kraken global and one of the most recognized brands in crypto for retail, traders and beyond.
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(00:00) Intro
(01:10) Arjun’s Background
(14:08) Culture + Product Velocity
(16:45) Arjun’s Incentives
(18:03) Ads (Katana)
(18:50) 1st month at kraken
(21:56) Prioritizing What To Build
(26:00) Future Onchain Trading
(31:20) Kraken Stablecoin
(33:38) Crypto Market Structure
(35:16) Competitor Analysis
(40:17) Hyperliquid
(42:25) X Stocks
(44:58) Ninja Trader Acquisition
(49:33) IPO?
(52:39) Long term Leadership
(53:53) Ads (Eigenlayer, Geodnet)
(55:32) Prediction Markets + Perps
(59:16) Tokenization / Onchain IPOs
(01:04:18) What's Obvious to Arjun
(01:09:46) 4 Year Cycle
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Disclaimer: Nothing said on Empire is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Santiago, Jason, Rob and our guests may hold positions in the companies, funds, or projects discussed.
