Experts Want To Invest In Crypto Despite Strict Rules

Crypto market investors have long watched organizations’ efforts to discourage people from engaging in the industry. Given digital assets’ uncertain and volatile nature, many governments worldwide have repeatedly warned citizens of the dangers of investing in cryptocurrencies. But these warnings seem to go unheeded. Smart investors are stepping into the crypto space and investing heavily. 

The SEC has always been suspicious of cryptocurrencies, with the board expressing concerns that the product is unstable, regulations are inadequate, and investor protections are inadequate.

According to SEC Chairman Gary Gensler, not all cryptocurrency tokens currently on the market are in compliance with security rules and regulations. He warned that investors not only take risks by investing in unregulated cryptocurrencies but must also accept additional risks if they expect trading platforms to meet their desires.

A crackdown by the SEC and other watchdogs investigating the most nefarious companies in cryptocurrency has turned out to be good for the industry, and market participants say they are more likely to invest in the space after stricter enforcement.

Two main interventions include the US regulatory investigations of bankrupt crypto firms Three Arrows Capital and Celsius Network. Furthermore, the SEC is currently investigating NFT markets such as Yuga Labs, the creator of the famous BAYC NFT collection, because it is suspected of violating several security rules. 

Nearly 60% of the 564 respondents to the latest Bloomberg MLIV Pulse survey said they see recent lawsuits in crypto as a positive sign for the asset class. On the other hand, the crackdown would cause fear among investors, who see investing in an unstable environment since the authorities can stop the business of the financial vehicle at any time.

President of world markets at TIAA Bank, Chris Gaffney, said, “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,”. He added, “The more they can get crypto out of the Wild West and into traditional investing, the better off it’s going to be.”

In another Bloomberg survey, about 44% said they would choose to stay away from the sector as legal action by agencies targeting it increases. Overall, it shows that more people dare to enter the market.

Indeed, everyone in the crypto space needs proper regulatory policies for the sector to help it grow. Many government officials have echoed this sentiment, although not many steps have been taken to realize this goal since cryptocurrencies became popular many years ago.

In March, President Joe Biden planned to sign an executive order directing relevant agencies to investigate and formulate effective regulatory frameworks for the crypto industry.