Bitcoin value damaged by SEC statement
The crackdown on underhand or unregulated cryptocurrency business practices is continuing unabated. The latest blow against decentralized digital currencies came from the SEC. A public statement created by the agency has pointed out a number of issues with how online VC trading is carried out. For instance, the "Statement on Potentially Unlawful Online Platforms for Trading Digital Assets" offered this warning:
Many platforms refer to themselves as ‘exchanges,’ which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange. Although some of these platforms claim to use strict standards to pick only high-quality digital assets to trade, the SEC does not review these standards or the digital assets that the platforms select [...]
The Commission has no intention of giving up its pursuit of unregulated VC trading and exchanges, either:
In advancing the SEC's mission to protect investors, the SEC staff will continue to focus on platforms that offer trading of digital assets and their compliance with the federal securities laws.
This seems like a clear sign that increased regulation efforts are headed in the direction of the cryptocurrency world. Cryptocurrencies, especially Bitcoin, have become more widely known among the general public, and there have been plenty of calls from governments and regulatory bodies to clamp down on the “Wild West” tactics that some VC companies utilize.
Unsurprisingly, the statement had a detrimental effect on the already volatile cryptocurrency market. Bitcoin’s value plummeted from ~US$10,664 to ~US$10,146 within a single hour today, before closing at ~US$10,288. Ripple experienced a loss of -8.66% on the day and Litecoin was down by a similar figure, down -8.88% from the previous day.