Scott Melker, a well-known crypto analyst, claims that there is a “clear directive” to limit banking access for the crypto industry. This implies that the government and different regulatory bodies are trying to restrict cryptocurrencies like Bitcoin and Ethereum. Melker added that the decision of agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to vie for control over crypto assets regulations could have significant implications for the industry’s future.

This emphasised by the CFTC’s recent lawsuit against Binance. In the lawsuit, which also indicted Binance’s CEO, Changpeng Zhao, of violating trading and derivatives rules, Bitcoin, Ethereum, Litecoin, and a few stablecoins were designated as commodities. This has been seen as a cause for concern over the safety of both the institutional and the retail investors’ interests in the long term.

With more government action on cryptocurrencies, prices seem to be volatile in the market. This was apparent when after the lawsuit Bitcoin’s prices dropped by 4.4%. However, despite this there seemed to be swift recovery.

The overall message to take away is that even though cryptocurrencies might be too big to fail, regulatory challenges still exist. This highlights the importance of understanding the different regulatory challenges that the industry faces in order to make the most informed decisions when investing.

Overall, Scott Melker’s comments confirms the ongoing tug-of-war between the regulators and the crypto industry. As such, it is highly recommended for both retail and institutional investors to keep an eye on the different regulatory challenges that the market faces to remain prepared for potential risks.



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