Cryptocurrencies Remain in Tight Bear Grip on Regulation Concerns
The cryptocurrency market is drifting further into negative territory amid anticipation of regulatory actions across the world.
The cryptomarket is a sea of red on Tuesday as new signs of tighter regulation ahead have unleashed bearish mood within the cryptocurrency world. Authorities from the USA to Japan are working on a set of measures targeting fraudulent projects and Initial Coin Offerings (ICO).
Pretty much everything is down in the crypto market today. Source: Coins.online
Yesterday, a group of securities regulators from Canada and the United States revealed "Operation Cryptosweep" - an international crackdown on potentially deceitful cryptocurrencies and coin offerings. Cryptosweep constitutes about "70 inquiries and investigations and 35 pending or completed enforcement actions since the beginning of the month" and qualifies as the largest coordinated crackdown to date by state officials on digital assets scams.
"We’re putting ourselves in the shoes of investors. We’re seeing what’s being promoted to investors. And then we’re taking the next step and then we’re finding out whether they’re complying with securities laws," Joseph Borg, president of NASAA and the director of the Alabama Securities Commission, said.
Japan has a reputation as one the most friendly jurisdictions towards cryptocurrencies, but it seems that authorities have been reconsidering their stance. The head of Bank of Japan Haruhiko Kuroda said that central banks are extremely cautious about issuing digital currencies for general public due to such problems as cybersecurity risks and unclear consequences for the financial system as a whole. He reminded that central banks were discussing digital currencies during the latest G20 meeting, where those concerns were addressed.
Meanwhile, the Bank of England published a working paper devoted to various scenarios of risks and financial stability challenges related to central bank digital currencies (CBDCs). At this stage, the regulator has not found any reasons to worry about the adverse effect of introducing CBDC on private credit or on total liquidity provision to the economy. Though, the conclusions are preliminary as the central bank is going to do further research and analysis.
Uncertainty surrounding the potential consequences of those regulatory measures on the market, is certainly putting a lot of pressure on cryptocurrencies right now.