Cryptos Plunge As EU Crackdown, Phishing Scam And Rug Pull Hurt

Cryptocurrency prices crashed more than 4 percent early on Friday in reaction to the EU parliament voting to pass rules that could lead to a crackdown on anonymous crypto transactions. Crypto market sentiment was also dampened as news of a phishing scam as well as a likely rug pull emerged from the NFT space.

E.U.’s new regulations seek to expand the ambit of the anti-money laundering rules to cryptocurrencies by mandating collection of personal details of individuals transacting more than 1000 euros using self-hosted wallets, before facilitating the transaction. For the rules to be enacted, it would need to be passed via tripartite negotiations between the EU Parliament, European Council and the European Commission.

The Bored Ape Yacht Club, the popular NFT collection from Yuga Labs has reported that its official Discord has been hacked. Peckshield, a blockchain security specialist has in the meanwhile confirmed that at least one Mutant APE NFT has been lost due to this specific phishing scam.

Reports have also emerged of a possible rug pull that occurred on the Bored Bunny NFT collection, with losses estimated at $20.7 million.

Crypto market capitalization has plunged to $2.08 trillion versus $2.14 trillion on Wednesday. Only a handful of the top 100 cryptocurrencies have bucked the trend and posted overnight gains.

Bitcoin which had touched a 24-hour high of $47,512.03 is currently trading at $45,258.93, after suffering a 4.5 percent overnight decline.

Ethereum dropped 3.47 percent to $3,314.42 versus the 24-hour high of $3,434.47.

Solana (SOL) jumped to the 6th spot despite posting an overnight decline of 1.86 percent, as XRP (XRP) and Cardano (ADA) recorded much steeper declines. SOL is still more than 21 percent higher on a weekly basis, bolstered by institutional interest as well as hopes of videogame rollouts.

41st ranked Fantom (FTM), 48th ranked Aave (AAVE) , 65th ranked STEPN (GMT) and 96th ranked Synthetix (SNX) have resisted the broad-based decline.

Apecoin (APE) the governance token behind the Bored Ape Yacht Club, which is currently ranked 45th overall and 5th in the NFT category has shed close to 10 percent as news of the compromise of the official Discord emerged.

The debate following the Axie Infinity heist a week ago has raised the clamor for crypto related entities such as crypto exchanges and custodians to make adequate public disclosure of their obligation to safeguard digital assets held for their platform users.

Anonymous crypto transactions have for long been a pain point for regulatory and law enforcement agencies. The regulatory resolve, to address the issue of crypto facilitating money laundering or terrorism financing would only grow stronger in the days to come. Crypto industry would invariably have to brace for this.

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