Anxiety over increased regulatory scrutiny of cryptos combined with strong macro-economic headwinds dragged down crypto market capitalization by almost 6 percent overnight to $1.21 trillion. Reports of SEC investigation on Binance’s BNB crypto, adverse media reports on Binance processing large amount of illicit funds, IRA Financial filing lawsuit against Gemini Crypto exchange etc., added to the worries surrounding inflation and tight monetary policy. Reserve Bank of Australia’s 50 basis points rate hike as well as the interest rate review by ECB and inflation data release from the U.S. lined up for later in the week added to crypto market’s woes. A surge in the Dollar Index and Wall Street futures trading in negative territory also did not help much.
5th ranked BNB (BNB) dropped more than 9 percent overnight following a Bloomberg report that the U.S. SEC has commenced investigation on Binance’s BNB Coin. As per the report, the SEC is investigating whether BNB was a “security” requiring registration with the agency and whether its Initial Coin Offering in 2017 had broken securities rules by selling the digital token. A virtual currency is deemed to fall under the SEC’s sphere of activity if investors buy it to fund a company or project with the intention of profiting from those efforts.
Reports of the SEC investigation also triggered fears of which altcoin would be next in line for similar regulatory scrutiny by the SEC. Earlier on Monday, Reuters had reported that cryptocurrency exchange Binance facilitated around $2.35 billion worth of illegal transactions over a five-year period. Though Binance CEO “CZ” has refuted the allegations, BNB is down more than 9 percent on an overnight basis and over 12 percent on a weekly basis.
Fintech retirement plan custodian IRA Financial Trust on Monday announced that it has filed a lawsuit against Gemini cryptocurrency exchange for the $36 million hack in February. The retirement and pension account platform claimed that the cryptocurrency exchange did not have proper safeguards to protect consumer funds.
Bitcoin dropped to a 7-day low of $29,311.68 and is currently trading at $29,534, down more than 6 percent on an overnight basis and 7 percent on a weekly basis. Bitcoin dominance is at 46.4 percent.
Ethereum also dropped to a 7-day low of $1729.41 in the past 24 hours. It is currently trading at $ 1753.45, losing 8 percent in a day and 11 percent in a week. Ethereum’s dominance touched 17.5 percent.
3rd ranked Tether (USDT) traded between $0.9992 and $0.9996 in the past 24 hours.
4th ranked USDCoin (USDC) traded between $0.9997 and $1.00 in the same period.
6th ranked Cardano ADA dropped more than 6 percent overnight whereas 7th ranked XRP(XRP) shed 3.7 percent. Solana (SOL) dropped more than 12 percent.10th ranked Dogecoin (DOGE) is trading 4.7 percent lower.
8th ranked BinanceUSD (BUSD) traded between $0.9984 and $1.00 in the past 24 hours.
Justin Son, founder of Tron Foundation on Tuesday said that the TRON DAO Reserve has transferred Tether (USDT) worth $100 million to Binance to buy more BTC and TRX as a stablecoin reserve. 13th ranked TRON (TRX) which commands a market cap of $7.4 billion is trading almost 4 percent lower on an overnight basis.
17th ranked UNUS SED LEO (LEO) has bucked the trend to trade with more than 3 percent overnight gains.
15th ranked Avalanche (AVAX), 30th ranked Cosmos (ATOM), 37th ranked Internet Computer (ICP), 42nd ranked Aave (AAVE), 46th ranked Axie Infinity (AXS), 58th ranked IOTA (MIOTA), 60th ranked Waves (WAVES), 62nd ranked Neo (NEO), 69th ranked Loopring (LRC), 74th ranked Curve DAO Token (CRV) and 82nd ranked Convex Finance (CVX) have made losses more than 10 percent on an overnight basis.
Amidst all the vagaries of the market, crypto world is watching with bated breath as the regulatory scrutiny of crypto sphere increases with each passing day.
A proposed crypto bill has been released to the public on Tuesday that inter alia seeks to transfer the authority for the crypto sector to CFTC from SEC. The bipartisan bill, entitled the “Responsible Financial Innovation Act” has been sponsored by Sen. Cynthis Lummis, and Kirsten Gillibrand.
Also, Hong Kong’s Securities and Futures Commission on Sunday said it has noticed NFTs which cross the boundary between a collectible and a financial asset and structured in a form similar to “securities”, or as interests in a “collective investment scheme” (CIS). In such cases, the SFC has said that marketing or distributing it may constitute a “regulated activity” requiring a licence from the SFC unless an exemption applies.
Meanwhile, Ethiopia has banned digital currencies and warned citizens against engaging in illegal transactions.
It is high time that regulation caught up with innovation. Regulating cryptocurrencies could very well be a healthy development not just for the investors but also for the industry as a whole.
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