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SEC crackdowns are making crypto more attractive to investors, according to survey

By Daniela Ešnerová

17:59, 24 October 2022

SEC and crypto logos illustration
Some 60% of 564 polled investors said the SEC’s recent action against cryptocurrencies is “a positive sign for the asset class”. – Photo: ShutterStock

A recent poll suggesting that the Securities and Exchange Commission's (SEC) crackdowns on cryptocurrencies could make the sector more attractive to investors, will undoubtedly come as a surprise to many industry players. 

The survey by Bloomberg's MLIV Pulse shows that the majority of polled investors - some 60% of the 564 respondents - believe the SEC’s recent action against cryptocurrencies is “a positive sign for the asset class”. 

The cryptocurrency industry has its reservations about the way the US financial regulator has been overseeing the emerging sector, however, players such as Coinbase (COIN) and Ripple (XRP) are calling for more formal directions from the watchdog.

Ripple (XRP) to US Dollar 

In July, one of the world’s biggest cryptocurrency exchange platforms Coinbase (COIN) started a petition calling on the watchdog for clearer rules.

“Our petition calls on the SEC to develop a workable regulatory framework for digital asset securities guided by formal procedures and a public notice-and-comment process, rather than through arbitrary enforcement or guidance developed behind closed doors,” the petition, signed by Coinbase's chief policy officer,  Faryar Shirzad, read

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XRP/USD

0.60 Price
-4.350% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BTC/USD

64,984.20 Price
-1.780% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

DOGE/USD

0.12 Price
-6.140% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

ETH/USD

3,135.55 Price
-7.220% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

Coinbase (COIN) share price chart

High profile cases

The SEC is currently embroiled in a host of court cases with crypto firms, with the most prominent one being its almost two-year-long case with RippleLabs centered around the question whether XRP is a security and therefore falls under SEC's remit.

Another recent example of the SEC’s ruling on a cryptocurrency coming into the spotlight was when the US reality TV star and billionaire, Kim Kardashian, got a $1.29m fine for promoting a token EthereumMax on her Instagram.

The penalty had some unintended consequences as the EthereumMax token actually surged further after the SEC news brought more attention to it.

Markets in this article

XRP/USD
Ripple / USD
0.60474 USD
-0.02725 -4.350%
COIN
Coinbase Global Inc (Extended Hours)
234.70 USD
-11.77 -4.780%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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