Crypto.com Suspends US Institutional Services As SEC Scrutiny Increases
Friday 9 On June 1, Crypto.com, the Singapore-based cryptocurrency exchange, announced the suspension of its institutional exchange services in the United States, according to a company statement. The decision, which will take effect from and including 21 June 2023, is primarily attributed to the weak demand from institutional customers in the prevailing market scenario.
Institutional customers, typically large, accredited entities with significant investment capacity, have been the target audience for Crypto.com’s institutional service. However, the current market landscape, most recently led by strict regulatory scrutiny and volatile conditions, has led to a decline in demand from these institutional units.
Reading the regulation room
While Crypto.com is suspending its institutional exchange service, the company’s mobile application and retail platform will continue to operate unhindered in the United States. Indeed, retail users will still have access to cryptocurrency derivatives trading regulated by the Commodity Futures Trading Commission and the Exchange’s UpDown Options offering, which enables users to speculate on the future movements of a variety of cryptocurrencies.
In the wake of the SEC’s lawsuit against Coinbase and Binance this week, alleging violations of securities laws, globally operated exchanges are taking the temperature of the regulatory atmosphere. This move comes at a time when the US is proving to be a challenging terrain for cryptocurrency companies. Such a regulatory crackdown has intensified in the past eight months following the collapse of FTX and has been met with resistance from the wider cryptocurrency ecosystem.
Just before the suspension of its US institutional service, Crypto.com received a major payment institution license for digital payment token services from the Monetary Authority of Singapore, allowing it to offer its services in the country.
Crypto.com, a recognized brand in the crypto space, had earlier this year announced a 20 percent reduction in its global workforce in January 2023. The company (partly known for its commercial actor Matt Damon in 2021) allows customers to buy and sell cryptocurrencies. It also offers a Visa debit card with which users can spend digital assets.
As the regulatory environment in the United States continues to evolve, exchanges around the world may be forced to quickly change their policies and operations to avoid ending up in a similar situation as Binance and Coinbase.