Global regulators have significantly reduced the risk of another FTX-style scandal in the digital assets sector, according to a study by London-based investment manager Nickel Digital Asset Management.
The research, conducted with institutional investors and wealth managers, revealed that 75% of firms believe regulatory actions have curbed the risks posed by bad actors in the crypto space, with 20% saying the risk has fallen sharply.
Nickel’s survey, which included respondents from the US, UK, Germany, Switzerland, Singapore, Brazil and the UAE, found that some concerns remain. While most participants believe the situation has improved, 18% think the risk of another scandal remains unchanged, and 7% even feel the risk has increased despite regulatory efforts. The firms surveyed collectively manage around $1.7 trillion in assets.
Crucially, there is consensus that regulators are committed to addressing issues in the digital asset sector. 34% of institutional investors and wealth managers surveyed believe regulators are very committed to developing robust rules, while the remaining 66% said they are quite committed. This dedication from regulatory bodies is playing a key role in reshaping attitudes towards crypto.
Custody concerns outweigh volatility in crypto investments, study finds
Additionally, investors said they expect Europe to take the lead in setting global standards for crypto regulation over the next five years, with 31% predicting it will be the most proactive jurisdiction. By comparison, 24% believe the US will lead, while 18% point to Asia, 15% chose the UK, and 12% the Middle East.
The research also highlighted a positive sentiment towards the crypto sector, with 88% of respondents expressing optimism about its future. 19% said they were “very positive”, while the remaining 12% were neutral.
Anatoly Crachilov, CEO and founding partner at Nickel Digital, said: “Robust regulation is central to the success of the digital assets sector and particularly important for institutional investors. The collapse of FTX and other scandals were major watershed moments for the sector as they helped drive increased regulation and tough action including criminal charges.
“The bad actors’ risk can never be eliminated, but through technical solutions such as off-exchange settlement solutions, the counterparty risk can be significantly mitigated. The industry has achieved major progress in that respect.”
