Bitcoin drops over increased scrutiny of exchanges, now down 16% from high this week

Finance news

Bitcoin fell again Thursday, bringing its losses from a high reached earlier in the week to greater than 15 percent, after news of increased regulatory scrutiny on cryptocurrency exchanges.

The cryptocurrency fell about 7 percent to $9,825 over the last 24 hours on Coinbase. It reached a high for the week of $11,624 on Monday.

Bitcoin dropped below $10,000 Wednesday following news of compromised accounts on a major Hong Kong-based exchange and a statement from the U.S. Securities and Exchange Commission that expanded its scrutiny to cryptocurrency exchanges. News overnight from Japan added to those concerns.

Bitcoin over the last 24 hours

Source: CoinDesk

Japan’s Financial Services Agency suspended operations Thursday at two relatively small exchanges, Bit Station and FSHO, for one month. The regulator said a manager at Bit Station used customers’ bitcoin for personal purposes, according to wires and a Google translation of an online statement.

Japanese authorities also ordered business improvements at five other exchanges, including Coincheck. The exchange lost more than $500 million worth of Nem’s xem coins due to a hack in late January. A senior official from the Japanese Financial Services Agency said in a Reuters report that Coincheck had enough funds to reimburse customers.

The announcements followed news Wednesday that some accounts at Hong Kong-based Binance may have been compromised due to phishing.

“The [application programming interface] for the exchange malfunctioned and sent sell orders into the market,” said Brian Kelly, a CNBC contributor and head of BKCM, which runs a digital assets strategy for clients.

Separately on Wednesday, the SEC issued a “Statement on Potentially Unlawful Online Platforms for Trading Digital Assets.” The commission said if an exchange was trading digital assets that are considered securities, then the company must register with the commission or apply for an exemption.

The statement also said securities laws may also apply to companies storing digital assets, or “wallets.” The SEC did not specifically mention bitcoin, and analysts generally expect the commission is focused on new digital coins sold through promotional fundraisers called initial coin offerings.

Link to the source of information: