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Fundstrat Warns of Trading on Offshore Crypto Exchanges

Tim Alper
Last updated: | 1 min read

Regulators could have their sights locked on a new target in the crypto world – with Tom Lee’s Fundstrat Global Advisors warning that trading on offshore exchanges might become riskier.

Tom Lee. Source: a video screenshot.

The investment advisory firm, based in New York, has issued a new report on the crypto space, co-authored by Lee. Per Bloomberg, the authors wrote of “potential vulnerabilities” for certain crypto sectors “given the [current] regulatory trajectory.”

They wrote,

“We see select crypto market segments as more exposed to regulatory risks than others and are worth watching closely. We see offshore quasi-equity exchange tokens as an area of risk that investors may be underappreciating as some have had a history of compliance allegations.”

Lee and his co-authors added that they envisage “further risks with crypto tokens exclusively listed on offshore exchanges” in cases where “stricter United States investor prohibitions could limit liquidity and demand.”

And equity-backed tokens may not be the only target for regulators, the Fundstrat report authors wrote. They added that the DeFi (decentralized finance) sector was likely to “come under pressure for a lack of know-your-customer (KYC) and anti-money laundering (AML) protocols.”

However, the outlook for other crypto sectors is more positive news, the report’s authors claimed. They welcomed recent moves to ban crypto derivatives sales by the UK’s top financial regulator, the Financial Conduct Authority, claiming regulations like these would help crypto’s long-term cause by “helping reduce nefarious activity.”

Lee et al stated that BTC’s ability to power through the USD 11,000 mark was a sign of rude health.

At pixel time (14:45 UTC), BTC trades at USD 11,468 and is up by less than 1% in a day, and 6.66% in a week.

Learn more:
Global Regulation Will Help Crypto Go Mainstream – Former Regulator
Regulators May ‘Disallow Trading on DEXs Entirely,’ Investor Warns
BitMEX Case Might Prompt a Closer Regulatory Look into DeFi