Investing.com – Bitcoin extended its selloff on Tuesday as negative sentiment on cryptocurrencies continued after a Fed official claimed the industry was becoming a “farce.”
Bitcoin fell 3.85% to $8,091.2 on the Bitfinex exchange from a high of $8,431.2
The cryptocurrency industry has become a “farce” as the light-natured regulation of the industry, where barriers to creating a new cryptocurrency is “zero,” was attracting increased levels of fraudulent activity, said Minneapolis Federal Reserve President Neel Kashkari.
Kashikari tempered his comments somewhat saying “there will probably be a shakeout, and maybe a handful of these things [cryptocurrencies] will end up surviving.”
That added to renewed regulatory fears after the North American Securities Administrators Association (NASSA) unveiled “Operation Cryptosweep,” on Monday, according to a statement on the website of the Alabama Securities Commission.
"The actions announced today are just the tip of the iceberg," Joseph Borg, head of the Alabama commission and current president of the NASAA, said in the statement.
“Not every ICO or cryptocurrency-related investment is fraudulent, but we urge investors to approach any initial coin offering or cryptocurrency-related investment product with extreme caution.”
The threat of a regulatory crackdown in cryptos has weighed on demand as data showed the total market cap of cryptocurrencies fell to about $367 billion, at the time of writing, down from about $380 billion on Monday.
Falling demand for cryptos saw a sell off across mega-cap cryptocurrencies.
Ripple XRP fell 3.38% to $0.65500 on the Poloniex exchange, while Ethereum fell 6.04% to $655.67.
Bitcoin Cash fell 7.80% to $1,141.30, while Litecoin fell 4.30% to $129.49.