Fundstrat Sees Benefits for Crypto Market in Regulations
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11 October
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Fundstrat Global Advisors believes the wave of new regulations is rather good than bad for the crypto market. The recent FCA's ban of cryptocurrency derivatives for retail investors is beneficial in the long term as the limitations will reduce nefarious activity in the industry, wrote Tom Lee, David Grider and Ken Xuan in a new report, Bloomberg has learned.

Previously, the UK's Financial Conduct Authority (FCA) prohibited the sale of cryptocurrency derivatives and exchange-traded notes (ETNs) to retail investors.

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The decision had been made after the research work carried out between July and October 2019. The new regulations will come into force on January 6, 2021. The ban affects not only investors, but also companies issuing crypto derivatives, their suppliers, including brokers, investment platforms and financial advisors.

According to Fundstrat's analytics, the measures taken by regulators will help "cleaning up bad actors."

"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," the analysts said.

However, the analysts do believe that some crypto areas "are exposed to regulatory risks than others and are worth watching closely."

"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 added.

Earlier in October, Ripple Labs said it might leave the United States overseas in response to excessive regulation.

According to Ripple's Executive Chairman Chris Larsen, the company is "increasingly frustrated" over a hostile attitude to the crypto market from the federal government, including the Securities and Exchange Commission.

European Commission Publishes Provisional Crypto Regulatory Framework

However, Larsen admitted that Ripple's relocation will not end US jurisdiction over many of its operations.

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