Perceived risk and regulatory clarity as drivers of investor trust and satisfaction in cryptocurrency investment decisions

The study proposes the Crypto Trust Formation (CTF) Model as a multidisciplinary framework addressing how perceived financial, security, and compliance risks impact investor trust and satisfaction in a crypto ecosystem context. Leveraging behavioral finance and extending the Technology Acceptance Model (TAM) and Perceived Risk Framework (PRF), the study analyzes 385 cryptocurrency investors using PLS-SEM. Findings indicate all three risk dimensions significantly lower trust and, paradoxically, investment satisfaction. Additionally, clarity in regulations was found to mitigate the perceived financial and regulatory risk (but not security risk) as it pertains to trust, demonstrating key boundary conditions for technological risk. Mediation analysis show trust to be a partial mediator between the risk perceptions and satisfaction. This study forms and validates the crypto trust formation model, thus, advancing the theory by describing trust as an emergent property in decentralized systems as multi-layered, contextually and institutionally driven. The model also provides cryptocurrency platform developers, investors, and regulatory bodies practical guidance to build investor commitment. JEL Classification: G41 (Behavioural Finance: Investment Strategies)