JAKARTA - Cryptocurrency regulation in the United States (US) is still a hot issue, especially after the US Securities and Exchange Commission (SEC) lost several legal cases against crypto companies. However, global investment bank JPMorgan reminds investors that US crypto regulation will not relax in the near future, considering the crypto industry is still very irregular.
In a note released last week, JPMorgan analysts explained that optimism in the crypto space regarding the approval of bitcoin exchange-traded funds (ETF) by the SEC did not signal a change in regulatory attitude towards the crypto industry as a whole. They cited two recent legal cases in which the court decided to support Ripple Labs and Grayscale Investments, which are crypto companies sued by the SEC.
"Although this year's Ripple vs SEC and Grayscale vs SEC court decisions represent a legal defeat to the SEC, it is far from clear that tightening crypto industry regulations will significantly decrease in the future given how unregulated the industry is," said JPMorgan analyst.
JPMorgan also doubts that US lawmakers will change their stance because of the two legal cases, especially after the FTX fraud scandal involving its founder and former CEO, Sam Bankman-Fried. FTX was a crypto exchange that went bankrupt last year on suspicion of fraud and money laundering. "Crypto regulation in the US is still pending," they said.
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JPMorgan analysts also said that the recent bitcoin rally was "not too much," adding that factors driving the increase in cryptocurrencies, such as the approval expected from the SEC's bitcoin spot ETF may have a minor impact on bitcoin price movements.
Currently, the SEC is considering between eight and 10 bitcoin spot ETF apps. JPMorgan said in September that it expects the SEC to approve multiple bitcoin spot ETFs at once.
However, they remain unsure that this ETF will attract new capital into the crypto sector. Instead, they expect this ETF to transfer investment from existing bitcoin products, such as Grayscale's bitcoin trustee (GBTC), the upcoming ETF, and bitcoin mining company.
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