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Amidst the regulatory turbulence going against crypto this year, Crypto.com has become another company to pull back from servicing institutional US-based customers. The latest report says that Singapore-based cryptocurrency exchange will not provide US Institutional exchange service in the region.
However, it claims that the reasoning behind it is not the erratic regulatory environment but the lack of demand for institutional-grade services.
Low Demand Reason for No Institutional Exchange Service – Crypto.com
The current regulatory environment has put a question mark on the future of crypto in the US. Many are seeing SEC’s latest battle against multiple exchanges and about 61 different cryptocurrencies as the government’s way to go against crypto. It has resulted in many exchanges delisting cryptocurrencies that once rules the price charts.
And since many of those assets were held by institutional investors, institutions started to sell off their own holdings in a bid to look for greener pastures. That has resulted in low demand for institutional-grade services.
Crypto.com has said in a statement given to Decrypt that it has given advanced notice to institutional users about service suspension.
But retail users don’t need to worry, as the institution says that retail services are still available.
Crypto.com has said that retail users will still have access to cryptocurrency derivates trading and UpDown Options trading. The latter lets users open long and short positions on future movements of certain cryptocurrencies.
Regulatory Woes Making it Difficult For Crypto Exchanges to Work Properly
June 2023 has been hard for the entire cryptocurrency market due to SEC’s ongoing battle against major players in the cryptocurrency space. It has set its sights on Binance.US, citing that Binance is contravening every regulatory measure to stay operational. And in its case against Coinbase, SEC has said that the company is violating securities law violations.
This legal tussle between exchanges and regulatory bodies has impacted the cryptocurrency market negatively. Bitcoin has dropped below its $26k mark and is currently trending just above $25k.
One of the reasons for this tumble has been given by Optimisus. Optimisus has reported that two more Russians are facing charges for laundering more than 647,000 Bitcoins that were stolen from Mt Gox.
News reports like these are probably consolidating people’s belief that laundering and hiding finances is all Bitcoin is good for. The impact of that perception on the Bitcoin market is for all of us to see.
Crypto.com Acquires Payment Institution License in Singapore
Reporting its “licensure milestone”, Crypto.com announced on June 1 that it had received its MPI (Major Payment Institution) license from the Monetary Authority of Singapore. With it, Crypto.com is now able to provide DPT (Digital Payment Token) services in the region.
Kris Marszalek, CEO of Crypto.com, said that this would ensure responsible digital innovation in the digital sector. He further added that Singapore is evolving into a hub for blockchain and fintech innovation.
While this news goes to show that other countries are receptive toward crypto offerings, it comes on the heels of the recent SEC issues. So, we don’t know how long it would take for the Security Exchange Commission to start looking at Crypto.com the same way it does Binance and Coinbase.
Conclusion
Crypto.com is the third cryptocurrency exchange to pull back its services (in a way) from the US region. However, it is the first one to do so voluntarily. Has it taken this decision due to the perceived low demand for institutional services? Or is it a way for Crypto.com to take pre-emptive action before the SEC starts looking into it as well?
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