In an unexpected twist, the American cryptocurrency landscape suffered another blow as Crypto.com revealed its intentions to terminate its institutional service. This startling decision marks the company as the most recent crypto firm to bid adieu to the United States. It is a direct consequence of the intensifying scrutiny from Gary Gensler’s Securities and Exchange Commission (SEC).
The Curtain Call: Crypto.com Seeks A Institutional Exit
On June 21, Crypto.com is poised to halt its institutional services for its US clientele. The termination is primarily credited to the “limited demand from US-based institutions under the existing market conditions,” according to the company’s official statement.
It’s essential to comprehend the difference between an institutional and retail investor for a more profound understanding of Crypto.com’s decision. Institutional investors are substantial entities that manage investments on behalf of others, including pension and mutual funds. In contrast, retail investors are individuals who invest their funds.
Follow CryptoMode on Twitter, Youtube and TikTok for news updates! Crypto.com has ensured that “institutional users affected by the transition were provided with adequate advanced notice for a seamless shift,” to minimize the disruption.
In the face of these changes, the Crypto.com retail app remains a glimmer of hope. With a user base of over 80 million, it is set to continue its operations as usual, barring any unforeseen circumstances.
The Regulatory Landscape: Navigating Rough Seas
The crypto industry is navigating through stormy regulatory seas in the United States. Several firms have expressed their plans to scale down or completely cease their operations in the country over recent months. Most attribute their decisions to the increasingly antagonistic climate of regulation and enforcement, with Gary Gensler’s SEC being a prime antagonist.
In a related development earlier this week, the SEC launched legal suits against Coinbase and Binance, the two largest cryptocurrency exchanges globally. Coinbase has already voiced its intentions to relocate out of the United States.
Galaxy Digital, Nexo, and Paxos, three other prominent exchanges, have also unveiled their plans to depart from the US for regulatory reasons. Countries across the globe are actively enticing these businesses to their jurisdictions, hoping to capitalize on the US’s regulatory setbacks.
Concluding Thoughts
Crypto.com’s exit indicates the current state of the US crypto industry. The ongoing exodus of crypto firms indicates an urgent need for a more balanced regulatory approach that protects investors without stifling innovation.Â
As the dust settles, it remains to be seen how the US will respond to the changing landscape and whether it can regain its position as a favorable destination for crypto businesses.
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