The US crypto industry could be in for a tough time ahead, as regulators continue their crackdown on some of the biggest companies in the space, experts have warned.
The ongoing crypto crackdown, sometimes referred to as Operation Choke Point 2.0, is already on top of every industry leader’s mind.
But according to Martin Grant, global head of regulatory affairs at financial services firm JST Digital, the regulatory clarity crypto companies want will not necessarily be delivered any time soon.
Commenting in an Insider article on Wednesday, Grant said regulatory agencies are currently “pushing hard to tilt the current regime to provide more investor protection.”
“As they do that, however, the question becomes whether new rules simply bring more clarity for the industry or if they instead “cripple an emerging industry.”
After all, it is clarity the industry wants” Grant explained:
“At the end of the day industry participants are searching for regulatory clarity, which has not yet been achieved.”
The warning from Grant follows a broad regulatory crackdown on crypto in the US.
Among the most notable developments recently has been the Wells notice that Coinbase was served with where the SEC threatened legal action and a lawsuit against Binance and its CEO Changpeng Zhao by the Commodity Futures Trading Commission (CFTC).
Meanwhile, Braden Perry, a former senior trial attorney for the CFTC, said in the same Insider article that more regulation is likely to come simply because there are more and more companies entering crypto.
Perry explained that the rise of crypto has meant that all kinds of investors have jumped on board:
“With the rise of cryptocurrency, the crypto investment community has significantly grown, and both sophisticated and novice investors have joined the fray.”
He added that the investment environment for crypto exchanges and wallets has been “transformed,” and said this means the area is now “ripe for novel products and services — but also abuse.”
“The ever-increasing amount of exchanges/wallets, and issues/hacks has undoubtedly served as a shot across the bow to the regulators and likely will be the impetus for future rulemaking,” the former CFTC attorney noted.
Further, Perry also warned that regulatory crackdowns like the one we are seeing now often lead to increased volatility in markets, even if the pace at which regulators move may be uncertain.
“[…] such a public move with relatively notorious companies will undoubtedly affect the market, as seen in the price fluctuations recently, and FTX‘s collapse,” he said.
This news is republished from another source. You can check the original article here.
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