The price of Bitcoin went down for the third day in a row after regulatory fears on cryptocurrency exchanges in both US and Japan which are the two most active markets for the currencies. Bitcoin has already gone down by more than 3% in Asia trading and is currently trading below the $10,000 mark after Japan Financial Services Agency ordered two exchanges to stop trading for one month and penalized four others.
The announcement by the Japanese authority came hours after the US Securities and Exchange Commission warned that Online trading platforms should register with the Commission. This is part of scrutiny that is being carried out by many governments around the world to prevent concerns which range from cyber theft, money laundering to trading outages. Even though these regulations tend to affect the cryptocurrency prices negatively many analysts say it will be positive in the long-term as trading will become safer.
Japan and the US seem to have reacted quickly after news on Wednesday stated that hackers had caused irregular trades at Binance which is one of the World’s biggest exchange platform. This led to caution about the risks of using exchanges that operate in a legal grey zone. Even though Binance stated that no funds were stolen from the exchange, it stated that it was unable to reverse the errant trade without any other clarification.
Japan which has already legalized Bitcoin in the country ordered FSHO and Bit station to stop operations for a month. The others which include GMO Coin, Zaif, Bicrements and Mr. Exchange are facing penalties. In other news, FSA also ordered Coincheck to revise its management, have better anti-money laundering procedures and send a full report before 22nd March.
In the United States SEC stated that platforms serving similar to exchanges must register with the agency as a national securities exchange. The Commissions believe that there are many platforms calling themselves exchanges which may confuse investors that they are regulated. Platforms, however, avoid registering with the agency to avoid compliance burden that comes with regulations including regular inspections. More to the inspections they are also required to monitor their markets and follow all SEC rules to ensure fair trading.
These rules have deterred some of the biggest trading platforms like Coinbase which are not registered with SEC but have instead obtained money transmission licenses from different states. On the other hand, Gemini is regulated by New York Department of Financial Services and operates as a trust company. Gemini President Cameron Winklevoss said that: “We are happy with the statement from SEC. It’s true that the trading of ICO tokens that are not registered have gone on for far too long. This is dangerous for the investors and even the cryptocurrency market.”
Was Binance hacked?
Binance customers took to social media yesterday to say that their accounts had been hacked. Some investors indicated that the hackers had sold their coins to buy a cryptocurrency called Viacoin. The exchange however in a statement said that it was only a target but the coins are safe. Binance noted that it was however unable to reverse some trades from the targeted accounts. In conclusion, Binance said: “We are advising all the traders to keep precaution to ensure that all their account credentials are safe.”