The roster of crypto exchanges that have ceased their U.S. operations just expanded by one more entry. Singapore's Crypto.com has officially stated its decision to suspend services to American institutional entities.
The exchange advises all of its high-volume clients to finalize their transactions and withdraw their funds by June 21, 2023. At present, this decision only impacts companies and institutions. Retail customers, who number approximately 80 million worldwide, have been reassured that the trading app will continue to serve them.
Crypto.com, a Singapore-registered company, was established in 2016. It's a centralized cryptocurrency exchange that enables users to buy, sell, and store digital assets.
The platform made its U.S. debut in 2020 and showed exponential growth, amassing 5 million active users in just a few weeks. By the close of 2022, the number surged to 50 million, evidencing a strong demand for its services in the U.S. market.
Despite its explosive growth, Crypto.com had managed to avoid the SEC's radar. Why, then, is the exchange choosing to fold its operations?
It seems that the exchange founders have taken the initiative and won't wait for the SEC to finish feasting on Coinbase and Binance before turning their gaze to other companies. Notably, Kris Marszalek, the CEO at the Crypto.com, has been proactive in keeping global regulators appeased:
- He managed to secure an official cryptoasset provider license in the U.K.
- Earned a CFTC license for their derivative product UpDown for retail trading.
- Received a license from French regulators and invested €150 million in the economy of France.
- Suspended all operations with USDT for Canadian users at the behest of the Ontario Securities Commission (OSC).
- Beyond that, he is also an official sponsor of prestigious sports clubs and organizations such as NWSL’s Angel City FC, UFC, Formula 1, and FIFA.
However, as evidenced by Coinbase's trajectory, conforming to the stipulations of U.S. regulators isn't a guarantee for unfettered commercial activity or unhindered project development. It seems the SEC follows its own principles, which have little resonance with common sense and concern for the country's budget. Hence, the founders of Crypto.com chose to fortify their position, sidestepping a potential lawsuit from Gensler.
Yet, much like consummate diplomats, they've chosen to phrase this delicately. Marszalek's official statement articulates:
We recently made a business decision to suspend the institutional offering of the Crypto.com Exchange in the U.S. as of 11:59pm EDT June 21, 2023 due to limited demand from institutions in the U.S. in the current market landscape. Impacted institutional users were given advance notice to support a smooth transition
The American crypto community is certain that the situation won't just affect institutional investors and are already scouting for alternate platforms for trading and safeguarding their digital assets. Especially since it became known that at the same time as Crypto.com is closing its doors to U.S. institutions, it has applied for a license to provide the same services in Singapore.
It looks like the cryptocurrency industry is ready to break free from Uncle Sam's embrace and venture into uncharted digital territories. Of course, this is contingent on whether Gary Gensler decides to curb his unfounded fervor.
