Crypto.com has revealed plans to terminate its services to institutional clients in the United States, citing limited demand in the country. Based on the announcement, the decision will take effect beginning June 21.
Crypto.com has given a 12-day notice before closing down its institutional business in the United States. These are the large, accredited customers with more money to invest than typical retail clients.
Impacted institutional users were given advance notice to support a smooth transition.
According to the company, the US offers limited demand as far as institutional customers are concerned. Notably, the exchange attributes this gloom to the prevailing atmosphere in the crypto playing field, an action that points fingers at the US Securities and Exchange Commission (SEC).
While the company has complained about waning demand among institutional clients, it has assured that retail business will remain unaffected. This means demand among this cohort of investors remains stable, or sufficient, at best, capable of delivering value for the company.
This decision regarding the Crypto.com exchange business in the U.S. does not impact our Crypto.com retail app used by more than 80 million users worldwide in any way.
It is worth mentioning that when there is no demand for a product, the company spends more on finances, resources, human resources, and all forms of input without getting any value from it. As such, the most sensible move is to cauterize such an outlet and dedicate more muscle to the product that gives a return on investment.
As Crypto.com closes the door for institutional investors in the country, retail investors will continue using the platform at will, leveraging the firm’s Crypto.com’sC-regulated UpDown Options.
The move makes Crypto.com the latest collateral damage in the war between the US SEC and cryptocurrency exchanges in America. This comes after BinanceUS suspended USD deposits following warnings by the SEC. As reported, the federal regulator sued Binance, the largest crypto exchange by trading volume, and its CEO Changpeng Zhao on June 5, citing violating securities law in claiming BNB and BUSD as securities.
A day later, the regulator went after Coinbase on related charges of operating as an unregistered security exchange.
As the agency continues to crack down on crypto exchanges, the Fear of Uncertainty and Doubt (FUD) continues to weigh down on crypto prices. At the same time, it deters institutional investors from playing their hand based on fears of another case similar to the FTX implosion that saw investors lose funds. , leading t lost funds.
Notably, the regulator has already identified a similarity between Binance CEO Changpeng Zhao and former FTX CEO Sam Bankman Fried, who transferred customer funds to an account he controlled.