Cryptocurrencies dropped close to 7 percent in the past 24 hours amidst a continuing stream of bad news for the industry. A U.S. regulator-led lawsuit against the KuCoin exchange, a budget proposal to halt the tax benefit on crypto losses, the collapse of Silvergate Bank and the plunge in Silicon Valley Bank’s shares dominated crypto market sentiment and added to the renewed rate hike fears.
Anxiety amidst the release of the monthly jobs data also weighed heavily on sentiment. The U.S. economy added 311 thousand jobs in the month of February. Markets were expecting an addition of 205 thousand jobs versus 504 thousand in the month of January. The unemployment rate however increased to 3.6 percent amidst expectations that it would be steady at 3.4 percent.
New York Attorney General Letitia James on Thursday filed a lawsuit against KuCoin for failing to register as a securities and commodities broker-dealer and falsely representing itself as an exchange. KuCoin is a virtual currency trading platform that allows investors to buy and sell cryptocurrency through its website and app. Through her lawsuit, Attorney General James seeks a court order that stops KuCoin from misrepresenting that it is an exchange, prevents the company from operating in New York, and directs KuCoin to implement geo-blocking based on IP addresses and GPS location to prevent access to KuCoin’s mobile app, website, and services from New York.
The lawsuit claims that KuCoin claimed to be an exchange without registering with the Securities and Exchange Commission as a national securities exchange or appropriately designated by the Commodity Futures Trading Commission as is required under New York Law. KuCoin also allegedly failed to comply with a subpoena issued by The Office of the Attorney General to provide more information about its digital asset trading activities in the state. This legal action is claimed to be one of the first times a regulator is claiming in court that ETH, one of the largest cryptocurrencies available, is a security.
Sentiment was also marred over the fears that the new budget proposals of President Biden would change the tax treatment of cryptocurrency transactions by eliminating the investors’ ability to take advantage of losses to lower their tax bills.
Close on the heels of the collapse of the crypto-focused Silvergate Bank, tech-lender Silicon Valley Bank announced on Wednesday, plans to offer $1.25 billion of its common stock and $500 million of depositary shares in separate offerings, in the backdrop of an after-tax loss of $1.8 billion in the first quarter of 2023, triggered by the loss on sale of securities.
Shares of the California-based SVB Financial Group (SIVB), the holding company for the tech-focused bank, plunged 60 percent on Thursday sending ripples across the banking industry and stock markets worldwide. Wall Street witnessed a sell-off on Thursday that spilled over to global markets on Friday.
Bitcoin plunged 7.4 percent in the past 24 hours. It is currently trading at $20,052.12 after touching a low of $19,628.25 earlier in the trade.
Ethereum shed 8.3 percent overnight and is currently changing hands at $1,406.96. Ether too plunged to a low of $1,378.53 earlier in the trade.
19th ranked UNUS SED LEO (LEO) is the highest ranked cryptocurrency to trade in the green zone. The token has gained 1.5 percent overnight and 2.4 percent in the past week. 21st ranked Cosmos (ATOM) has also gained 3.2 percent despite the broader market turbulence.
84th ranked Conflux (CFX), the best performer of 2023 among the top 100 cryptos, is the greatest laggard on an overnight basis with losses of close to 16 percent. 72nd ranked Dash (DASH) and 62nd ranked Huobi Token (HT) have also lost more than 14 percent overnight.
62nd ranked Huobi Token (HT) plunged 14.6 percent overnight to $4.15 amidst a flash crash earlier in the trade that saw the cryptocurrency of the Huobi cryptocurrency exchange plunge to $1.84 and recover soon after. H.E. Justin Sun, the exchange’s global adviser, later attributed the market fluctuations to the leveraged liquidations caused by few users triggering a cascade of forced liquidations in the spot and H.T. contract markets. He assured that in order to further improve the multi-currency liquidity of Huobi Global, a liquidity fund would be set up with an investment of 100 million U.S. Dollars and later confirmed the transfer of 100 million USDC.
More than 10 percent of the top 100 cryptocurrencies have erased gains in 2023. 9th ranked Dogecoin (DOGE) is the highest ranking crypto to trade with losses on a year-to-date basis. DOGE is down 8.7 percent in the past 24 hours and 8.5 percent on a year-to-date basis.
Amidst the stream of bad news, crypto market capitalization has dropped to $924 billion, versus $992 billion a day earlier.
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