SEC Crypto Crackdown a Positive Sign for Investors: Report
- The SEC was accused of stifling innovation with its continued investigation of crypto projects.
- Several US regulators seek to bring the crypto industry under their jurisdiction, with the SEC leading the race for such calls.
- Retail investors believe the presence of a regulator such as the SEC provides a sense of security in the volatile crypto industry.
The US Securities and Exchange Commission has been on what most people consider a “witchhunt” of the cryptocurrency industry. The regulator has been at the forefront of the race to regulate the sector. While most crypto enthusiasts see the SEC as a “taskmaster” or an unwelcome presence, a new report reveals that investors are thrilled about it.
About 60% of the 564 participants in the most recent Bloomberg MLIV Pulse survey said they see the latest wave of crypto crackdowns as a good indication for investing in the asset class. In contrast to 56% of professional investors, almost 65% of retail investors said they were more inclined to invest with more crackdown against crypto. However, just 35% of retail and 44% of professional investors indicated that increased enforcement action would make them less willing to invest.
The SEC has intensified its efforts in recent months, conducting high-profile inquiries into the collapsed cryptocurrency companies Celsius Network and Three Arrows Capital, as well as a rumored investigation into Yuga Labs and the larger nonfungible token (NFT) market.
The SEC recently penalized model and reality TV star Kim Kardashian $1.26 million for improperly endorsing the EthereumMAX cryptocurrency. Several lawmakers have criticized the SEC for its “regulation by enforcement” approach. However, such sentiments have not stopped SEC officials from seeking to regulate the industry.
Gurbir Grewal, the SEC’s enforcement director, received criticism from the crypto community and the public after stating that the SEC would continue to investigate crypto projects despite claims that its presence stifles innovation.
The SEC further showed its seriousness when it announced an Office of Crypto Assets in September, which is solely responsible for dealing with applications and services related to crypto assets.