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Bitcoin continues retreat as regulatory pressure on crypto mounts in the US

By Andrei Chirileasa

09:54, 4 August 2021

SEC concept image
SEC - Photo source: Shutterstock.com

Bitcoin (BTC), the world’s leading cryptocurrency, traded in the red on for the fourth day in a row Wednesday 4 August, after pushing past $42,000 over the weekend. On Wednesday morning, bitcoin’s price was just above $37,800, down 1.8% over the last 24 hours.

Bitcoin’s price correction comes amid increased regulatory pressure in the US. A tax on cryptocurrency transactions is planned by Congress, and on Tuesday SEC Chairman Gary Gensler called for tighter regulation of the crypto market.

Speaking at an international conference, Gensler described the crypto market as a “Wild West” riddled with fraud and investor risk.

“We need additional congressional authorities to prevent transactions, products and platforms from falling between regulatory cracks. We also need more resources to protect investors in this growing and volatile sector,” he said in his remarks.

“Wild West”

Gensler said he agreed with his predecessor Jay Clayton, who once said that “every ICO I’ve seen is a security” – therefore, federal laws also apply to crypto tokens.

“Generally, folks buying these tokens are anticipating profits, and there’s a small group of entrepreneurs and technologists standing up and nurturing the projects. I believe we have a crypto market now where many tokens may be unregistered securities, without required disclosures or market oversight,” Gensler explained.

He added that this leaves prices open to manipulation and investors vulnerable.

ETH/USD

3,322.95 Price
+8.110% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 6.00

XRP/USD

1.33 Price
+19.500% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.01168

BTC/USD

98,385.70 Price
+4.020% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

ADA/USD

0.85 Price
+3.810% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.00646

“Right now, we just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West,” the SEC chair stated.

He added: “This asset class is rife with fraud, scams and abuse in certain applications. There’s a great deal of hype and spin about how crypto assets work. In many cases, investors aren’t able to get rigorous, balanced and complete information. If we don’t address these issues, I worry a lot of people will be hurt.”

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Threshold moment for bitcoin

Fresh demands from the US financial regulators on cryptocurrencies are “a threshold moment” for bitcoin and other digital assets, believes Nigel Green, chief executive and founder of deVere Group, an independent financial advisory and asset management group.

“These demands by the SEC – the financial regulator of the world’s largest economy – underscore again that cryptocurrencies are a major growth market and are gaining further influence within the mainstream global financial system,” Green said in an email comment.

He believes this is a “threshold moment” as it shows that the time has come to hold crypto assets to the same standards as the rest of the financial system.

“This shake-up will likely generate some market turbulence, but ultimately regulation will be good for investors,” he concluded.

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Read more: Bitcoin down 5% after 10-day rally

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