Bitcoin Tumbles Below $9K As Regulatory Concerns Spook Market

Bitcoin and other cryptocurrencies fell sharply this week as markets were spooked by a bevy of concerns that included the stern measures adopted by regulators, a massive sale of Bitcoin, and an attempted large-scale hack at a popular crypto exchange.

The price of the virtual currency dropped below $9,000 in afternoon trade in Asia. The biggest cryptocurrency has fallen more than 20 percent this week, causing worry for those who “HODL”, implying holding on to Bitcoin than selling it.

Earlier this week, the US Securities and Exchange Commission asked exchanges trading digital currencies to register with the agency.

The regulator also said that an entity seeking to operate as an alternative trading system is also subject to regulatory requirements, including registering with the SEC as a broker-dealer and becoming a member of a self-regulatory organization.

Bitcoin, which was trading around $11,000, fell below $10,000 following this.

In Japan, the Financial Services Agency on Thursday ordered seven trading platforms to improve their system security measures and submit a written improvement plan by March 22.

The exchanges are Tech Bureau, GMO Coin, Mister Exchange, Bicrements, Coincheck, FSHO and Bit Station.

Further, activity at two exchanges SHO and Bit Station were suspended for a month after it was discovered that their internal control systems were lacking adequate measures to counter money laundering and terrorism financing.

The Japanese watchdog has been talking tough on regulating the cryptocurrency exchanges after the $530 million theft of digital money from Tokyo-based Coincheck, which is not registered with the FSA.

Still in Japan, Nobuaki Kobayashi, a Tokyo attorney who is the bankruptcy trustee for the now-defunct Mt. Gox crypto exchange and known as a “Bitcoin whale”, said on Wednesday that he sold about $400 million worth of Bitcoin and Bitcoin Cash since late September.

The Bitcoins Kobayashi sold came from the hoard left behind when Mt. Gox collapsed in February 2014 owing to theft that went unnoticed for several years. The exchange was the biggest at the time, handling around 70 percent of all Bitcoin about a year earlier.

The sale happened as Kobayashi raised cash to distribute among Mt. Gox’s creditors. The lawyer still has $1.9 billion worth of tokens and will consider selling those too.

Adding to the dampened sentiment was the news that the popular crypto exchange Binance faced “a large scale phishing and stealing attempt” on Wednesday, which it was able to thwart by the next day.

“All funds are safe and no funds have been stolen,” the exchange said on Thursday. However, it admitted that it will not be able to reverse some trades involved.

As of 8.55 am ET on Friday, Bitcoin was down 9.48 percent at $8,943.35 and Ethereum was lower by 7.81 percent at $694.16 on Coinbase.

by RTT Staff Writer

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