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Tuesday, June 25, 2024
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Crypto.Com Suspends US Institutional Exchange Amid SEC’s Crypto Crackdown

  • Crypto.com committed more than $1 billion in sports sponsorships before last year's cryptocurrency crash.
  • Fellow exchanges Coinbase and Binance were sued this week by the U.S. Securities and Exchange Commission.
The company signed a 20-year, $700M arena naming rights deal in 2021.
Gary A. Vasquez-USA TODAY Sports

Crypto.com, which holds a 20-year, $700 million Los Angeles arena naming rights deal signed in 2021, is suspending its institutional exchange service for U.S. customers on June 21. The company cited the “current market landscape” in its decision, which comes the same week as cryptocurrency firms Binance and Coinbase were sued by the Securities and Exchange Commission on allegations that they violated securities laws.

“We recently made a business decision to suspend the institutional offering of the Crypto.com Exchange in the U.S. as of 11:59 pm EDT June 21, 2023 due to limited demand from institutions in the U.S. in the current market landscape. Impacted institutional users were given advance notice to support a smooth transition,” Crypto.com said in a statement to Blockworks. 

Institutional investors are typically large accredited customers and companies. U.S. customers will still be able to use Crypto.com’s retail app which has more than 80 million users worldwide.

Singapore-based Crypto.com owns naming rights to Crypto.com Arena, home to the NBA’s Los Angeles Lakers and Clippers, the NHL’s Kings, and the WNBA’s Sparks. Crypto.com has a plethora of other sports sponsorships, including UFC, Formula 1, FIFA, the NWSL’s Angel City FC, and a jersey patch deal with the NBA’s Philadelphia 76ers. 

The U.S. federal government is cracking down on cryptocurrency as the SEC filed lawsuits earlier this week against Coinbase and Binance, alleging they violated laws by offering digital assets as unregistered securities. Binance has stopped letting its customers trade with U.S. dollars on its platform, while Coinbase continues to sponsor the NBA and WNBA. The SEC also says Binance has mishandled customer funds and lied to American regulators and investors about its operation.

Crypto.com’s decision to remove its institutional trading platform in the U.S. follows last year’s collapse of the cryptocurrency market that included the bankruptcy of FTX, which formally held naming rights to the Miami Heat’s arena, sponsored MLB umpire uniforms and was backed by star athletes such as Tom Brady, Steph Curry, and Shaquille O’Neal. Voyager, which sponsored the NWSL, is another crypto firm that ceased operation in 2022.

Galaxy Digital, owner of the Candy Digital NFT firm that’s an MLB partner and lost its investment from Fanatics, is also moving operations out of the U.S.

“Certainly, in the short run, we’re going to look to move people out of the U.S., overseas, and lots of companies are,” Galaxy Digital CEO Mike Novogratz said, according to Decrypt. “Companies like ours are looking at how fast we can move people offshore.”

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