Cryptocurrencies were off to a really rough start and spent the week mostly in the red before a quick bounce this Friday. What’s up with that? I’ve rounded up the latest set of news to help y’all stay in the loop.
First off, here’s a snapshot of how bitcoin and its buddies have fared in the past seven days as of June 15, 3:00 am GMT. Still plenty of red even as some losses have been pared!
Bitcoin and its buddies woke up on the wrong side of the bed to start the week when news of a hack on South Korean exchange Coinrail broke out.
Coinrail offers more than 50 cryptocurrencies to its clients with a 24-hour volume of about $2.65 million according to Coinmarketcap.com. The exchange didn’t disclose how much was lost in the hack.
Granted this exchange is relatively small and the company later on clarified that only lesser-known altcoins were affected, the security incident still spooked a lot of investors to dump their crypto holdings. After all, there weren’t enough positive updates going around and confidence in the industry was undermined again.
U.S. regulators look into price manipulation
Regulatory jitters returned to haunt the cryptocurrency industry as U.S. financial watchdogs are busy looking into price manipulation practices.
This is on top of the ongoing probe opened by the U.S. Justice Department last month. Safe to say all eyes are on crypto these days!
It didn’t help that a research paper published by University of Texas at Austin professors revealed that Tether was used to manipulate bitcoin prices back in 2017. The study stated:
“By mapping the blockchains of bitcoin and tether, we are able to establish that entities associated with the Bitfinex exchange use tether to purchase bitcoin when prices are falling.
Such price supporting activities are successful, as Bitcoin prices rise following the periods of intervention. These effects are present only after negative returns and periods following the printing of tether.”
SEC official: Ethereum not a security
Altcoins got a bit of a relief towards the end of the week when SEC Corporation Finance Director William Hinman claimed that ethereum is not an investment that should be regulated like stocks or bonds.
During his remarks in a San Francisco conference, Hinman stated:
“Based on my understanding of the present state of ether, the Ethereum network and its decentralized structure, current offers and sales of ether are not securities transactions.”
Even so, the SEC continues to look into companies that use the Ethereum network for dapps, including funding rounds to raise capital for such. Hinman added:
“Over time, there may be other sufficiently decentralized networks and systems where regulating the tokens or coins that function on them as securities may not be required.”
For many, this provided a bit of clarity when it comes to regulation, easing the concerns currently dragging prices down. Others believe that the remarks are far from conclusive and that continuing investigations and their results could keep investors wary.