Crypto.com, a Singapore-based exchange, recently announced the shutdown of its institutional exchange service for US customers, raising concerns among users about the future of the platform.
Reasons for Crypto.com’s Institutional Exchange Shutdown:
Crypto.com’s decision to discontinue its US institutional exchange services, effective from June 21, 2023, can be attributed to two primary factors: limited demand and mounting regulatory concerns.
The exchange stated that the closure was a result of a combination of these factors, as it became increasingly challenging to sustain the institutional service amidst the evolving regulatory landscape and a market with relatively low demand.
Understanding Crypto.com Institutional Exchange:
Crypto.com Institutional Exchange was a specialized platform catering to the needs of institutional investors, such as hedge funds, banks, and financial institutions involved in high-volume trading.
The platform offered advanced trading features, including high liquidity, deep order books, and low fees, tailored to accommodate the requirements of large-scale traders.
While the institutional exchange service constituted a smaller portion of Crypto.com’s US business, its closure has sparked apprehension among users regarding the exchange’s future prospects.
Impact on Retail Users and Future Considerations:
It is important to note that Crypto.com’s institutional exchange shutdown does not directly affect its retail users or individual customers in the US.
At present, the company has not announced any changes to its retail services, allowing retail customers to continue using Crypto.com’s platform as usual.
However, the intensifying regulatory crackdown on crypto exchanges, as demonstrated by the SEC’s actions against Binance and Coinbase, leaves room for uncertainty about the potential impact on retail services in the future.
Crypto.com’s Position in the Context of Regulatory Scrutiny:
The decision by Crypto.com to exit the US institutional market is part of a broader trend of increased regulatory scrutiny on crypto exchanges.
Notably, the SEC’s legal actions against Binance and Coinbase have created a challenging environment for crypto businesses.
Robinhood, a popular trading app, has even delisted certain crypto assets mentioned in the SEC’s lawsuit. Binance has ceased US dollar deposits and withdrawals due to severed banking partnerships, while Coinbase has opted to continue operating and plans to fight the SEC’s actions in court.