On Wednesday, 7/3/2018 yesterday, the SEC stated that online platforms that trade cryptocurrency considered by securities need to be registered to the agency. Due to a statement from the SEC, bitcoin prices quickly plummeted 10 percent below $ 10,000 amid concerns about rising regulations.
"The SEC continues to tighten rules for securities and non-securities but no further names," said Spencer Bogart, a partner at Blockchain Capital. But, "of all crypto assets, bitcoin appears to be least regarded as security - with a long shot."
The bitcoin price tumbled below the $ 10,000 level after the Securities and Exchange Commission (SEC) said it would ask the exchange of digital assets to register with the agency. The statement refers to a digital asset that is considered a security.
Due to the increasing regulation made by the SEC, cryptocurrency with the largest market capitalization value suddenly churned down nearly 10 percent in the Coinbase exchange. The SEC statement sparked fears that a tightening of regulations could limit the trading of virtual currencies in the future. Bitcoin fell close to $ 9,500 but recovered slightly to $ 9,969.
"If a platform offers the trading of digital assets deemed by securities and operates as an 'exchange exchange', as defined by federal securities laws, then the platform must register with the SEC as a national stock exchange or free of registration. SEC staff are concerned that many online trading platforms exist for investors because they are unregistered and not regulated by the SEC. Many platforms refer to themselves as "exchanges," which can give investors a misconception that they are regulated or meet the regulatory standards requirements of the national securities exchange, "the SEC said in a statement.
The statement from the regulatory body came after several weeks of the SEC making a summons in an attempt to establish better control over multiple platforms and cryptocurrency exchange exchanges.
"The SEC continues to tighten the rules between securities and non-securities but no further names," said Spencer Bogart, a partner at Blockchain Capital. However, he estimates that the crackdown will focus more on so-called "alt-coins" rather than bitcoin, potentially helping the price of cryptocurrency higher in the market.
"Of all the cryptocurrency types, it appears that bitcoin is considered a weak security coin - with a long shot," says Bogart.
Is securities law applicable to cryptocurrency, and remains a problem in much speculation, resulting in most companies relying on self-disclosure and lawyers to try to distinguish themselves from general fraud.
The current view of the security of an asset tends to follow the "Howey Test", derived from the 1946 US Supreme Court case. The decree states that a security involves investing money in a public company, in which investors expect profit from the efforts of others.
Bitcoin is down about 50 percent from the all-time highs close to the $ 20,000 level it achieved in December. However, bitcoin prices have fallen sharply since then as investors fear the tightening of government regulations that continue.
However, news of potential phishing problems in one of the cryptocurrency exchanges also weighed on the assets on Wednesday. In a statement on Twitter, Binance.com CEO Changpeng "CZ" Zhao said that the site is still investigating the potential for irregularities in trading.