The United States Securities Exchange Commission (SEC) and related agencies have recently intensified their efforts in cracking down on crypto projects. Consequently, the aggressive enforcement action has the potential to sway investor preference when getting involved in crypto.
In this line, professional investors at 56% are more likely to venture into cryptocurrencies with increased legal action in the digital asset space, while 44% are likely to stay back, the Bloomberg MLIV Pulse survey published on October 24 indicates.
Elsewhere, retail investors at 65% are also open to getting involved in the sector amid an increased crackdown as per the survey conducted between October 17 and October 21, targeting 564 respondents.
For years, a section of the crypto market considered legal action and regulation a bearish sentiment for the sector. However, amid the sustained market volatility characterized by high-profile bankruptcy cases.
SEC’s ongoing legal action
Notably, the SEC has launched investigations into the collapse of lending platform Celsius Network and Three Arrows Capital amid intensifying calls to protect investors. The agency is also probing Yuga Labs, the creators of the Bored Ape non-fungible tokens (NFTs) collection.
“I’m in the ‘yes’ camp. As a professional investor, you need a regulated investment opportunity and it opens the doors for more professional investors to get involved in crypto, if it’s more regulated,” said Chris Gaffney, president of world markets at TIAA Bank.
At the same time, a lack of regulations has been cited as the reason for keeping away institutional investors who were instrumental in the last crypto bull run. However, there is a general consensus that clear regulations will attract institutional investors waiting on the sidelines. In addition, a Finbold report indicated that high net worth investors continue to be interested in Bitcoin despite the prevailing uncertainty.
U.S. crypto regulations
Interestingly, despite SEC’s crackdown on crypto, the agency has been scrutinized for allegedly stifling development in the space. In this line, Finbold reported in July that crypto fans launched an online petition calling for the removal of SEC chair Gary Gensler from his position.
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