Crypto

Regulatory Clean-Up Moves are beneficial for Crypto, according to the Fundstrat

A number of regulatory changes reported this week are favorable for the well-known free-market crypto world, as per Fundstrat Global Advisors LLC. 

Developments such as the U.K. Financial Conduct Authority prohibiting the selling of cryptocurrency derivatives to the U.S. The Department of Justice developing an enforcement plan is helpful in the long run because it would serve to minimize nefarious conduct in the sector, as per a study by David Grider, Tom Lee and Ken Xuan.

They often pointed to the “cleaning up bad actors” authorities as supporting. Market emphasis on reporting that Square Inc. has purchased Bitcoin and Bitcoin ‘s potential to advance through $11,000 shows that cryptocurrency can power through these items, the study stated.

“Actions unsurprisingly indicate U.S. and global regulators are committed to stomping out illicit activity, securities violations, money laundering, price manipulation, and noncompliance with banking regulations,” the strategists wrote. “On balance, we view recent news as a positive for crypto markets, despite select smaller pockets of risk, and we believe the prevailing bull market trend is intact.”

Bitcoin moved to to $11,000 after such a strong $10,000 level protection in early September. Crypto fans were also inspired by Square Inc. ‘s acquisition of $50 million from Bitcoin in a bet by Chief Executive Officer Jack Dorsey that it would be an economic empowerment tool.

In other recent news, after being charged by the U.S. authorities with skirting regulations to deter money laundering, the owners of the cryptocurrency exchange giant BitMEX resigned from their positions.  Cybersecurity activist John McAfee, who had been supporting bitcoins, was detained in Spain on suspicion of U.S. tax evasion.

Fundstrat warned that, considering the regulatory trajectory, certain areas inside crypto may be vulnerable.

 “We do see select crypto market segments as more exposed to regulatory risks than others and are worth watching closely,” with projects in decentralized finance — or DeFi — coming under pressure for a lack of know-your-customer and anti-money-laundering protocols, the strategists wrote.

“We see offshore quasi equity exchange tokens as an area of risk that investors may be underappreciating as some have had a history of compliance allegations,” they said, and “see further risks with crypto tokens exclusively listed on offshore exchanges where stricter U.S. investor prohibitions could limit liquidity and demand.”

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