A new study conducted by Nickel Digital Asset Management reveals that 92% of institutional investors and wealth managers support the US regulators’ contentious 'regulation by enforcement' approach to the cryptocurrency sector.
The study surveyed investors and wealth managers in the US, UK, Germany, Switzerland, Singapore, Brazil, and the United Arab Emirates who collectively manage around US$3.5 trillion (£2.75 trillion) in assets.
Under the US Securities and Exchange Commission (SEC)’s regulation by enforcement method, major cryptocurrency exchanges including Coinbase, Binance and Kraken have found themselves aggressively targeted by the hawkish regulator.
Kraken was fined US$30 million earlier this year for securities law violations while Coinbase is subject to a raft of legal challenges, with the SEC even requesting that the exchange delist every cryptoasset barring Bitcoin (BTC).
Meanwhile, Binance has been steadily muscled out of the US market.
In June, Binance suspended US dollar deposits due to what it called “extremely aggressive and intimidating tactics in (the SEC’s) pursuit of an ideological campaign against the American digital asset industry".
Despite calls from Nasdaq-listed Coinbase for clarity over the regulatory position of digital currencies, the SEC has shown little regard for playing ball.
In June, the SEC compelled the courts to throw out a rule-making petition from Coinbase, stating that “no statute or regulation requires the commission to take such action on a specific timeline”.
SEC head Gary Gensler, a prolific crypto sceptic, believes that existing securities rules are sufficient to regulate cryptocurrency investment products.
Yet Nickel Digital’s research suggests that 41% of respondents believe regulators are very committed to introducing robust regulation, while a further 55% believe they are quite committed.
Around 90% of those surveyed believe that recent SEC action against Coinbase and Binance will ultimately be positive for the expansion of the digital assets sector.
The US’s hawkish approach contrasts with the regimes in Europe and the UK, jurisdictions with a more liberal approach to cryptocurrency regulation.
In the EU, the Markets in Crypto-assets (MiCA) bill was recently passed, while the UK government has recently resisted calls to bring crypto under gambling legislation.
Nickel Digital Asset Management is a London-based FCA-authorised and CFTC-registered investment manager that offers a range of digital asset strategy solutions for institutional investors.
This research was commissioned by Nickel Digital and conducted by market research company Pureprofile in July 2023.