Singapore-based cryptocurrency exchange, Crypto.com, has announced the suspension of its institutional exchange services in the United States, citing lackluster demand from institutional customers and a challenging regulatory landscape. The decision is set to take effect on June 21, 2023.
In a statement released on Friday, June 9, Crypto.com revealed its plans to halt its institutional exchange services in the United States. The decision comes as a result of diminished demand from institutional clients, who are typically large, accredited entities with significant investment capacities.
Crypto Exchange Face Regulatory Pressure, Declining Institutional Demand
The prevailing market scenario, characterized by stringent regulatory scrutiny and volatile conditions, has contributed to the decline in demand from institutional entities. This move highlights the growing challenges faced by cryptocurrency exchanges amidst increasing regulatory pressure.
Despite the suspension of its institutional service, Crypto.com assures its retail users that its mobile application and platform will continue to operate without any disruption. Retail clients will maintain their access to regulated cryptocurrency derivatives trading, which falls under the oversight of the Commodity Futures Trading Commission. Furthermore, they will continue to enjoy the benefits of the exchange’s UpDown Options offering, empowering them to make speculative predictions on the future price movements of diverse cryptocurrencies.
This development follows recent lawsuits filed by the U.S. Securities and Exchange Commission (SEC) against major cryptocurrency exchanges Coinbase and Binance, alleging violations of securities laws. The regulatory crackdown in the United States has prompted global exchanges to closely monitor the evolving regulatory environment.
The suspension of its U.S. institutional service comes on the heels of Crypto.com obtaining a significant payment institution license for digital payment token services from the Monetary Authority of Singapore. This license enables the company to offer its services within Singapore, showcasing its commitment to operating within compliant regulatory frameworks.
Earlier this year, Crypto.com made headlines by announcing a 20 percent reduction in its global workforce in January 2023. Despite these adjustments, the company remains a recognized brand in the cryptocurrency space, known for its various offerings, including the ability to buy and sell cryptocurrencies and a Visa debit card for spending digital assets.
As cryptocurrency regulations continue to evolve, exchanges worldwide may need to swiftly adapt their policies and operations to navigate the changing landscape and avoid potential legal entanglements. The recent actions taken by regulatory bodies have triggered resistance from the broader cryptocurrency ecosystem, further emphasizing the need for clear guidelines and industry collaboration in this rapidly evolving sector.