Cryptocurrencies traded lower on Tuesday as worries over moves to regulate crypto markets continued to depress sentiment.
It followed broad weakness on Monday, leaving bitcoin trading well under the $11,000 mark, at $10,777.
In particular, traders focused on reports from New York, where judges are deliberating cases that could decide whether cryptos can be regulated within the US in a similar way to stocks and bonds.
A court will hear US government prosecutors argue that cryptos can be considered a security under US law so as to secure a conviction against local businessman Maksim Zaslavskiy.
Prosecutors have brought a criminal case against Zaslavskiy, alleging investors were duped into putting funds into an initial coin offering (ICO) backed by assets such as real estate and diamonds that did not actually exist.
Meanwhile, in a separate case before a Federal Brooklyn court, a judge is also essentially being asked to decide how cryptos and ICOs should be treated under US laws.
The US Securities and Exchange Commission (SEC) has brought a case against a Canadian company marketing an ICO known as PlexCoin, claiming investors were misled.
The decisions in such cases are likely to have important implications for the future of ICOs and cryptos in the US.
In South Korea, new rules came into effect on Tuesday that limit crypto trading only to those using real-name bank accounts in a bid to tackle money laundering and the criminal use of digital currencies.
South Korean crypto players largely sounded an upbeat note on the long-term impact of the changes.
“It's the start of a crackdown on anonymity and the illegal use cases that some cryptocurrencies might have. If, afterwards, investors and companies have more legal security working in the ecosystem, it's going to have some short-term downsides, but long term, it's going to have a really, really big boost,” said Julian Hosp, co-founder of cryptocurrency start-up TenX.