Crypto.com’s Sponsorships Could Face SEC Scrutiny, But Executive Believes Benefits Outweigh Risks – Decrypt
Crypto.com may not be the biggest crypto exchange by trading volume, but it’s certainly one of the most well-known.
Lebron James plays in an arena named after the company, and the exchange has sponsorship deals with the Philadelphia 76ers, Formula 1, and the Ultimate Fighting Championship, or UFC, among others.
All of these relationships with big names arguably put a target on Crypto.com’s back in the U.S., especially as the Securities and Exchange Commission continues its crackdown on crypto. Most recently, the agency informed Uniswap Labs, the developer behind one of the most popular decentralized crypto exchanges on the market, that it was the target of potential litigation.
However, the president and COO of Crypto.com, Eric Anziani, told Decrypt that any attention its sponsorship deals attract from regulators is worth it. “Being known in the U.S. means you’re also known in the rest of the world,” he said during an interview in the Park Hyatt in the center of Paris. “And, you know, it comes with a trade off… but I think it’s critical for us to achieve our mission.”
Over the course of about half an hour, in a crowded hotel lobby, Anziani also touched on competition among exchanges, meme coins, and, of course, regulation.
SEC scrutiny—or lack thereof
As opposed to other big name exchanges like Coinbase and Binance, Crypto.com has managed to evade at least public mention by the SEC in either a lawsuit or settlement. “We’ve set up a very strong foundation of the business in the way we operate,” he told Decrypt. “And we have engagement with regulators across the globe, including in the U.S.”
He said that, because there’s no “fit-for-purpose” crypto regulation in the U.S., Crypto.com has to adhere to the rules and regulations that govern companies that sit squarely in the realm of traditional finance.
But would he be willing to speak on any anticipated or ongoing litigation with the SEC or regulators in the U.S.? “I don’t have too much to comment,” the Crypto.com president said.
Meme coins, meme coins, meme coins
Take one look at Crypto.com’s X feed, and there’s post after post celebrating the listing of tokens like Crob Mob, Degen, or Pepe. For an exchange that’s trying to establish itself as a legitimate financial institution in the eyes of regulators, its constant celebration of casino-like tokens may raise eyebrows.
“It’s a new way of people expressing themselves,” he said of meme coins. “And we want to be there to offer some of that in a functional manner to our customers.”
However, Anziani emphasized that, as opposed to other platforms, Crypto.com isn’t completely cashing in on the meme coin craze. “We’re always a little bit conservative,” he added, “and want to make sure we offer things that make sense for our community.”
Competition among exchanges
FTX has fallen, Binance’s Changpeng Zhao is awaiting sentencing, and the U.S. Justice Department just charged KuCoin and its two founders with flouting American money laundering laws.
Amid the crackdown on its competitors and the recent bull market, Crypto.com has since seen its exchange trade volume increase from between $100 to $200 million per day in April 2023 to a recent high of almost $3 million in early March, according to data from CoinGecko.
“There has been consolidation,” he said. “And we’ve benefited from that, because we were more conservative in our risk management practices and [have engaged] with regulators across the world.”
However, Anziani doesn’t want just a few exchanges to have a stranglehold on the market. “At the same time, we still want people to be able to innovate,” he added. “And we want new startups to come in.”
Unsurprisingly, the Crypto.com president pointed to a familiar specter that inhibits that growth of crypto companies: the lack of regulatory clarity. “We want to support those startups to be able to grow,” he said, “despite the increasing cost of managing regulatory frameworks.”
Source link
#Crypto.com #Sponsorships #Attract #SEC #ScrutinyExec #Worth #Trade #Decrypt
