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Cryptocurrencies Plummet as U.S. Takes Action Against Cryptocurrency Firms

Cryptocurrency NewsSep 11, 2018 10:41PM ET
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© Reuters. Bitcoin and other major cryptocurrencies continued to tumble on Wednesday morning

Investing.com – Bitcion and other major cryptocurrencies continued to tumble on Wednesday morning in Asia, as Wall Street announced actions against companies involved with cryptocurrencies and intensifying scrutiny of the digital tokens.

Bitcoin fell 1.95% to $6,275.10 at 9:50PM ET (01:50 GMT) on the Bitifinex exchange giving up some gains from the past couple of days.

Ethereum nosedived 9.3% to $180.38 after hitting a one-year-low on Tuesday.

“Ether’s price was inflated earlier due to the ICO [initial coin offering] mania. As people pledged Ether with ICOs, the supply-demand equation got skewed – now ICOs have cooled down, and hence the setback,” said Joe DiPasquale, CEO of BitBull Capital.

XRP/USD also slid by 4.99% to $0.25891 in the last 24 hours on the Poloniex exchange, while Litecoin fell 6.46% to $51.140.

The gloomy mood in the cryptocurrency market is partly due to Wall Street’s tightened control of firms with digital currencies, with a series of actions, including levying fines.

The U.S. Securities and Exchange Commission (SEC) noted that some tokens might be considered securities, making them their issuance, sale and trading subject to federal laws.

Jay Clayton, chair of SEC, said back in February that most sales of new tokens, known as ICOs, should be considered securities. However, the SEC did not specify which coins are securities.

On Tuesday, a New York federal judge ruled that a case could proceed in which the U.S. securities law was used to prosecute fraud cases involving cryptocurrency offerings.

On the same day, a group of technology veterans and a number of cryptocurrency companies said they are forming the Blockchain Association, which will become the first lobbying group in Washington representing entrepreneurs and investors building off the technology behind Bitcoin.

“The Blockchain Association is an effort to get the preeminent companies in the space together so [policymakers] know they’re hearing from companies that welcome regulation when it’s appropriate. We’re not companies looking to game the system but trying to develop a legal and regulatory system that’ll stand the test of time,” said Mike Lempres, Coinbase’s chief legal and risk officer.

Elsewhere, Russia’s central bank successfully held an experimental ICO within its framework testing platform. The bank launched the regulatory sandbox in April this year with the goal of creating a safe and convenient platform to launch products and services based on blockchain and other financial technologies.

Cryptocurrencies Plummet as U.S. Takes Action Against Cryptocurrency Firms
 

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