Cryptocurrency exchange Crypto.com recently announced its decision to wind down its institutional service for American clients on June 21. The Singapore-based digital asset platform cites “limited demand from institutions in the U.S. in the current market landscape” as the primary reason behind this move. Institutional investors are large, accredited customers with more money to invest than typical retail clients, and only companies can use Crypto.com’s institutional service.
The company has ensured that impacted institutional users were given advance notice to support a smooth transition. Interestingly, this decision regarding the Crypto.com exchange business in the U.S. does not impact the Crypto.com retail app, which is currently serving more than 80 million users worldwide. Crypto.com is a well-recognized platform that enables clients to buy, sell, and spend cryptocurrencies through a Visa debit card.
This development follows the company’s announcement of cutting its global workforce by 20% back in January 2022. Crypto.com, known for its marketing efforts, even featured actor Matt Damon in a commercial last year to promote its brand. However, recent events raise questions about the challenges that crypto companies face while operating in the U.S.
The U.S. has become an increasingly difficult place for crypto companies to do business as regulatory scrutiny intensifies. Just this week, the SEC filed lawsuits against major crypto exchanges Binance and Coinbase. Additionally, the regulator’s Chairman, Gary Gensler, hinted that digital asset companies weren’t necessarily welcome, stating, “We don’t need more digital currency.”
On one hand, the decision of Crypto.com to discontinue its institutional services in the U.S. can impact its overall growth and influence in the American market. Moreover, this move adds weight to concerns about the future of cryptocurrency in the U.S., especially with the regulator’s focus on increased oversight.
On the other hand, the company’s statement emphasizes that the move does not affect millions of retail users around the world who have already adopted and rely on the platform’s services. As the demand for cryptocurrencies and digital asset platforms remains strong, the potential for further development and growth cannot be overlooked, even when faced with regulatory challenges.
In conclusion, Crypto.com’s decision to wind down its institutional services for American clients highlights the complex relationship between the evolving cryptocurrency markets, the companies operating within them, and the regulatory environment they confront. While skeptics may argue that such decisions signify worrisome trends, others maintain that the industry’s potential for growth and innovation continues to outweigh the challenges presented by increased regulation.
Source: Decrypt
