Nickel: Crypto bad actors risk has fallen as regulators get a grip

October 24, 2024

Bitcoin

Tough action by global regulators has cut the risk of another FTX type scandal hitting the digital assets sector, according to new global research by London-based Nickel Digital Asset Management (Nickel), Europe’s leading digital assets hedge fund manager.

The study with organisations invested in the sector found three out of four (75%) firms believe the ‘bad actors risk’ has been reduced by regulatory action with 20% believing the risk has fallen sharply.

Nickel’s research with institutional investors (including pension funds, insurance asset managers and family offices) and wealth managers in the US, UK, Germany, Switzerland, Singapore, Brazil and the United Arab Emirates who collectively manage around $1.7 trillion in assets found some lingering concerns about risks of another scandal. Around 18% questioned say the risk is unchanged despite regulatory action while 7% believe the risk has actually increased.

However institutional investors and wealth managers questioned are unanimous that regulators are committed to addressing issues in the sector with 34% agreeing they are very committed to developing robust regulation and 66% saying they are quite committed.

They highlight Europe as the jurisdiction most likely to lead the way over the next five years in developing more robust regulation with 31% choosing it compared with 24% selecting the US and 18% Asia. Just 15% chose the UK and 12% the Middle East.

Regulatory action is helping drive sentiment about the sector, the research found, with 88% questioned saying they were positive towards the sector and 12% saying they were neutral. Around 19% said they were very positive.