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The high volatility and absence of a proper regulatory framework have left many investors of cryptocurrencies in a fix.  In turn, they have started putting pressure on cryptocurrency exchanges because of both regulatory and market risk.

According to a report by The Economic Times, some lawyers and consultants representing exchanges and investors, the uncertainty over cryptocurrencies has led to this panic mode among investors.

Expert take

“The biggest problem is uncertainty. The investors are nervous and in pause mode,” said a senior M&A lawyer.

Several lawyers have also affirmed that because of the increasing regulatory risk there has been a huge investor discomfort. China’s recent crackdown on cryptocurrency has also added to the woes of the investors.

“We have heard reports about additional clauses being triggered to represent investor protection under regulatory stress but we have yet to receive a similar clause by any known entity,” said Shivam Thakral, CEO of cryptocurrency exchange BuyUcoin.

Investors worried

Investors are stressed at their inability to exit because ongoing deals have been put on hold after banks and Paytm refused to allow cryptocurrency transactions on their platforms. Many banks are reconsidering their involvement with cryptocurrency exchanges after there have been speculations on the government and RBI’s stand.

Many investors have asked exchanges for higher stakes as they have not yet achieved the milestones.

Investors at present are looking at this as a consolidation opportunity. They have asked companies to be on the look out for inorganic expansion.