Wednesday, March 7, 2018

Cryptocurrency's bad day. Here's the 3 reasons why...

It's been a rough day in cryptocurrency. There's nothing here worthy of panic, but still, you're probably wondering the reasons behind today's dip, so let's dive in.

First - U.S. Securities and Exchange Commission is asking exchanges to register with them, as exchanges.

“If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.” the SEC said in a statement today.

Their concern is that when people hear the word "exchange" they associate it with the stock exchange, and all the rules and regulations that come with it. Not even the big ones currently are registered as such.  For example, Coinbase operates by getting money transmission licenses state by state, and Gemini is licensed where it resides, with the New York State Department.

Secondly - fears of a Binance hack. There's two options being debated at time of publishing.  Some saying Binance's API was exploited (this allows for people using other programs, or trading bots, to interact with Binance to facilitate the trades).

Binance however points to a phishing site with a URL that looks very close to the real thing - meaning nothing was hacked, some people were just tricked.

According to Binance founder CZ, the crooks won't get away with it either way, tweeting;

"We have localized the irregular trades, they will be reversed.  All funds are safe, thanks to the fast alarm.  Please learn to secure your accounts against phishing."

Third - Mt Gox comes to haunt us again. For those new to crypto, it was an exchange site that ended up a huge mess with a lot of stolen bitcoin (the full story is much longer, that's the basics).

The bankruptcy trustee for Mt Gox came out today and put some fear into the market, that a lot of the Bitcoin they're sitting on will be sold soon in order to begin paying off their creditors. They're still holding $1.9 Billion worth, and says they plan to offload them soon.

So, it's just one of those days.  While any 1 of these probably wouldn't have a huge effect on the market, all 3 at once has made today a rough ride.

Author: Ross Davis
San Francisco News Desk