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Crypto Market Wrap: Financial problems prevail over prices

By Monte Stewart


Photo of coins and graph
Two cryptocurrency companies financial problems prevailed over altcoin prices on Monday. - Photo: Shutterstock

In the battle for attention, cryptocurrency companies’ legal and financial problems prevailed over altcoin prices Monday.

Crytpo mixer Tornado Cash and lender Hodlnaut’s troubles overshadowed a somewhat choppy day of cryptocurrency trading that had few noticeable gains. But digital coins still fared reasonably well as several stayed in the green.

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Treasury Department imposes sanctions

The US Treasury Department imposed sanctions on Tornado Cash, alleging that the crypto mixer enabled North Korean hackers and other illicit groups to launder billions of dollars.

In a statement, US Secretary of State Antony Blinken said in a statement that Tornado Cash had laundered a portion of more than $600m stolen by North Korea’s state-backed Lazarus Group, which was sanctioned by the US in 2019.

North Korea, along with Russia, are the states most active in crypto-related crime

In a separate news release, Treasury said Tornado Cash was used to launder more than $7bn worth of virtual currency since the company’s inception in 2019.

The regulator added Tornado Cash’s website and 45 wallets to the US sanctions list and prohibited Americans from doing business with them.


Dodgy mixer 

A crypto mixer pools digital assets to shield their owners’ identities.

“Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks,” Brian Nelson, Treasury’s undersecretary for terrorism and financial intelligence, said in a statement.

A senior Treasury official told Bloomberg that Lazarus has laundered about $450m through Tornado Cash and the service was used to steal $100m from the Harmony blockchain’s Horizon Bridge in June.

It is not clear where Tornado Cash is based.


Hodlnaut freezes withdrawals

Meanwhile, Singapore-based Hodlnaut became the latest crypto lender to freeze withdrawals. The company cited “recent market conditions” – an excuse used by other firms – in a statement.


0.14 Price
-18.130% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872


2,914.14 Price
-9.860% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00


62,444.90 Price
-6.990% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00


464.85 Price
-12.560% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

Hodlnaut’s troubles followed those of fellow crypto lenders Celsius Network and Voyager Digital as well as hedge fund operator Three Arrows Capital, which have all filed for bankruptcy, and other companies. Celsius, Voyager and Three Arrows, also known as 3AC, ran into trouble when LUNA and TerraUSD collapsed.

“Hodlnaut is a relatively small service so we do not expect this news to have a noticeable impact on the price of the major assets, especially since the markets show an, arguably, more bullish structure than they did when the crypto credit crunch started in June,” Mikkel Morch, executive-director for crypto investment fund ARK36, told Bloomberg.

Bitcoin gets above $24,000

Crypto prices did not appear overly affected Monday. FLOW, which has been hot at times lately, was a notable gainer.

Flow up 12%

The coin was up about 12% when conventional markets closed in North America. (All figures based on CoinMarketCap data.)

Decred fell 6% after it slightly more than doubled on Friday.

Bitcoin (BTC) got above $24,000 at one point but finished under that mark during conventional trading hours. But ether (ETH), the main coin of the Ethereum blockchain, slightly outperformed its larger rival.

Hodlnaut froze all withdrawals, token swaps and deposits. The company said it is attempting to stabilize its liquidity and preserve assets, and hopes to share a recovery plan soon.


Thousands join lawsuit against SEC

Meanwhile, more than 70,000 Ripple investors have joined a class-action lawsuit against the United States Securities and Exchange Commission (SEC), says a lawyer representing XRP coin holders.

John Deaton said Sunday on Twitter that people of diverse backgrounds from all 50 American states, every US territory and 141 countries have joined forces in the legal dispute against the regulator.

Markets in this article

Bitcoin / USD
62444.90 USD
-4695.1 -6.990%
Ethereum / USD
2914.14 USD
-318.22 -9.860%
0.8345 USD
-0.2063 -20.090%
Stellar / USD
0.10122 USD
-0.0149 -12.940%
Ripple / USD
0.46147 USD
-0.08755 -16.090%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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