Study: SEC Investigations Drive Investors to Cryptocurrencies

    US Securities and Exchange Commission (SEC) investigations on crypto market seem to be working out.

    In a recent survey, 60% of respondents said they are more likely to join the digital asset ecosystem after noticing how the regulator intervenes toward problematic cryptocurrency firms, such as Celsius Network, Three Arrows Capital (3AC), and Yuga Labs.

    Investors like SEC’s approach

    According to the latest research by MLIV Pulse, 60% of the 564 participants supported the SEC’s stringent interventions against problematic crypto companies. Despite the market decline, the watchdog’s actions draw interest in the digital asset field.

    Chris Gaffney – President of World Markets at TIAA Bank – described himself as a professional investor and enthusiastic supporter of the cryptocurrency industry. In his view, additional regulations could make this field even more attractive:

    “The more they can get crypto out of the Wild West and into traditional investing, the better off it’s going to be.”

    Poll participants also commented on Bitcoin’s strong correlation with risk assets and the S&P 500 equity market index. 42% of them think this trend will sustain over the next 12 months, while 43% believe this will change and plan to increase their exposure to digital currencies over the same period.

    In September, Ethereum switched from Proof-of-Work (PoW) mechanism to Proof-of-Stake (PoS). This process, called “The Merge”, is expected to be a stepping stone for the future development of the protocol. As a result, some argued that the market valuation of ETH could surpass that of Bitcoin. About 33% of respondents said this could happen in the next 2 years.

    Cryptocurrencies are still a highly controversial topic. When asked to choose a word that characterizes this asset class, most participants answered “Ponzi” or “future”.

    Victoria Greene – a member of G Squared Private Wealth – is in the proponents’ club. According to her, crypto is “almost like a religion – if you believe, you will always believe no matter the price or the headwinds.”

    However, she pointed out that the field is still in its early stage and many people are unaware of its usage. She concluded that individuals with conservative views can stick with the Ponzi team for a while.

    SEC strengthens surveillance

    In September, the SEC discovered two companies running a Ponzi scheme. According to the allegations, Creative Advancement LLC and Edelman Blockchain Advisors LLC “fraudulently offered and sold securities, using false, misleading statements” from February 2017 to May 2021.

    The owner of these companies, Gabriel Edelman, raised nearly $4.4 million in that period and promised to invest in cryptocurrencies. However, the Commission still insisted he distributed only a small portion and used the rest to make credit card payments and sent money to family members.

    The SEC unsealed again a few weeks ago, accusing Arbitrade and Cryptobontix and their operators of deploying a pump & dump scheme relating to a cryptocurrency called Dignity (DIG). The companies guaranteed the token is backed by gold and is “trading exclusively” on the Russian platform Livecoin.

    The SEC investigation found none of those to be true and the operators pocketed more than $36 million in user funds.

    (Reference: Cryptopotato)

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