Institutional investors and wealth managers across the globe believe that their growing pressure on regulators is having a greater impact on the crypto space than recent high-profile developments, including the collapse of FTX; according to new research by London-based hedge fund manager Nickel Digital Asset Management.
Institutional investors and wealth managers across the US, UK, Germany, Switzerland, Singapore, Brazil and the UAE, which collectively manage around $816billion in assets, believe institutional pressure has the biggest impact on regulators’ commitment to taking tough action on the crypto and digital asset sector.
While many have debated whether the high-profile collapse of the FTX exchange would do more harm than good to the overall global perception of the crypto world, these institutional investors still see their pressure as having more impact on regulators’ attitudes.
The research found that 99 per cent of professional investors believe regulators are committed to cleaning up the sector – with 43 per cent believing they are very committed. A similar 97 per cent agree that recent crackdowns such as FTX and Binance are a positive for the sector.
Nickel Digital Asset Management, the regulated digital assets hedge fund manager founded by alumni of Bankers Trust, Goldman Sachs and JPMorgan, also asked for opinions on the impact of recent developments involving Binance, in which its former CEO Changpeng Zhao pleaded guilty to failing to maintain an effective anti-money laundering (AML) programme, among other charges.
Overall, 95 per cent believe that the settlement with Binance and its former CEO will lead to a safer digital asset sector for investors.
Who is leading the way?
Around 60 per cent of investors questioned believe that the US will lead the way in developing more robust regulation for the digital assets sector ahead of 52 per cent who believe Europe will do so. The UK (50 per cent) took the third spot on this list, far ahead of Asia (20 per cent) and the Middle East (18 per cent) regarding who will lead the development of digital asset regulation.
The US is also seen as the jurisdiction most committed to developing the digital asset market and becoming a leading global centre – around 63 per cent chose the US, ahead of 53 per cent selecting the UK and 37 per cent Germany.
Anatoly Crachilov, CEO and founding partner at Nickel Digital, discussed the findings: “The growing awareness of regulatory standards for the digital asset market for institutional investors underlines the increased interest in the sector.
“That interest will only mature if there is productive regulation and that is highlighted by the strong support for action against FTX and Binance with institutions convinced that regulators are taking the sector seriously.
“It is interesting, but not surprising, that investors see regulatory enforcement actions as a positive for the digital asset sector, particularly in the US, showing the sector’s need for regulatory clarity.”
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