Retail investors are highly reliant on markets, which are prohibited legally from participating in digital asset exchanges in the United States due to a lack of regulatory safeguards. The crypto community must accept the SEC’s regulatory framework to advance its sector into conventional financial institutions as the floodgates to these ordinary investors begin to open.
Crypto purists and their beliefs
Dan Schatt and Domenic Carosa believe crypto purists oppose the notion that ordinary investors, or those the SEC considers less financially competent, deserve more government protection. They claim that the policy creates an unequal power dynamic where only the bigwigs may trade, leaving a regular person on the sidelines twiddling his thumbs until big brother permits him to join. The fundamental point of cryptocurrency is to avoid such a situation. So what would make one want to join forces with agencies that have been perpetuating it for decades, such as the Securities and Exchange Commission?
While the purist viewpoint is correct in emphasizing the significance of retail investors, it overlooks the dangers they confront in the absence of regulatory protection. Before the United States could open the gates of digital asset trading to the world’s average students, teachers, and engineers, a clear regulatory framework to safeguard naive retail investors had to be built.
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Are Retail investors more important?
As important as they are to markets, retail investors are presumed by the SEC to be less financially savvy than institutional investors. As a result, ordinary investors are limited in what they may invest in and trade compared to authorized and institutional investors. Ultimately, the goal of regulation is to prevent financial behemoths from exploiting small investors by prohibiting them from participating in high-risk investments.