Goldman Sachs (GS) has reportedly shuttered its plans to open a trading desk Bitcoin (BTC) for the foreseeable future due to regulatory frameworks remaining unclear.
According to sources familiar with the matter, the multinational investment company has moved the plans to integrate cryptocurrency trading products further down a list of priorities. Goldman Sachs spokesperson Michael DuVally told Reuters, “At this point, we have not reached a conclusion on the scope of our digital asset offering.”
Due to the ability of digital currencies to revolutionize the way capital is moved around the world, without a central authority, and with relative anonymity, it comes as no surprise that rival investment banks, namely Morgan Stanley, approach cryptocurrency as “more than just a fad.”
Regardless of the promise, regulators continue to scrutinize initial coin offerings (ICOs) and cryptocurrency exchanges as a whole. The United States Securities and Exchange Commission has warned that digital assets issued in ICOs may be considered securities, meaning that trading them may need to comply with federal securities laws.
In the meantime, Goldman Sachs will shift its focus on other projects that involve cryptocurrency, such as custody services, where it will look to securely store clients’ digital assets, which is a highly requested element from investors looking to enter the relatively insecure market.
Following the Goldman Sachs decision, Bitcoin dropped nearly 6% to below $7,000 while the AltDex 100 Index (ALT100), a benchmark index for large-cap cryptocurrencies and tokens, is currently down over 9%.
More: Goldman Sachs is ditching near-term plans to open a bitcoin trading desk, instead focusing on a key business for driving Wall Street investment in crypto
Similar: Goldman Sachs May Offer Crypto Custody Service Despite Recent Criticism
Photo: Rafael Matsunaga / Flickr
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.