In a recent interview with Yahoo Finance, crypto analyst Scott Melker stated that there is a "clear directive" to crush banking access for the crypto industry.
He believes that regulators are working hard to cut off access for crypto companies.
Melker believes that although cryptocurrencies like Bitcoin and Ethereum are "too big to fail," regulators can still try to restrict on-ramps and off-ramps for American companies and retail investors. This could substantially limit their growth.
The crypto analyst also highlighted an ongoing turf battle between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Both agencies are now vying for control over the regulation of crypto assets.The confusion surrounding the classification of these assets, as Melker noted, could have significant implications for the industry's future.
The recent CFTC lawsuit against Binance serves as a prime example of regulatory pressure on the industry.
In stark contrast to the SEC, the agency designated Bitcoin, Ethereum, Litecoin, and a few stablecoins as commodities in the lawsuit, which accused Binance and its CEO, Changpeng Zhao, of violating trading and derivatives rules. Melker argues that the inclusion of these specific assets was no coincidence.
As a result of the lawsuit, the price of Bitcoin dropped 4.4%, but it has since recovered.
With major players like Binance coming under fire, the consequences for both retail and institutional investors could be significant as the crypto market continues to mature.