Tuesday, August 21Always On-point

Digital coins tumble in January amid Facebook, Tether concerns Bitcoin heads for worst monthly slide in almost four years

For cryptocurrency investors, January is turning into a month to rue.

Digital coins have mostly slid this week, with Bitcoin heading for its worst monthly decline since February 2014, as US regulators ramp up their scrutiny of one of the world’s largest digital currency exchanges while Facebook is banning ads tied to the industry.

Bitcoin is down about 29% this month, trading at $10,172 as of 8:35 in London, according to composite pricing compiled by Bloomberg. Rival coins Ripple and Litecoin have respectively slid about 45% and 29%, while Ethereum has managed a 47% increase. The four coins were little changed on Wednesday.

“The regulatory oversight and the clampdown is really coming to the fore right now,” Stephen Innes, head of trading for Asia Pacific at Oanda, said by phone from Singapore. “I don’t think we’ve seen the last of it.”

The US Commodity Futures Trading Commission sent subpoenas on December 6 to cryptocurrency trading venue Bitfinex and Tether, a company that issues a widely traded coin it claims to be pegged to the dollar, according to a person familiar with the matter who asked not to be identified discussing private information. The firms share the same chief executive officer.

Facebook, meanwhile, will ban ads on its social network promoting digital currencies, initial coin offerings and binary options, warning they’re “frequently associated with misleading or deceptive promotional practices.”

US regulators have moved to crack down on the industry after the emergence of various companies or people raising money through an ICO, or initial coin offering, with no apparent business behind it. The US Securities and Exchange Commission said this week that it got a court order freezing the assets of a Texas-based initial coin offering that claimed to have raised more than $600 million. The order stops AriseBank from raising any additional cash from investors.

Cryptocurrencies have yet to sustain a rally after a record $500 million heist from Japanese exchange Coincheck on January 26, further intensifying calls for increased oversight in global trading hotbeds such as South Korea.

© 2018 Bloomberg

Leave a Reply

Your email address will not be published. Required fields are marked *

Please wait...

Subscribe to our newsletter

Want to be notified when our article is published? Enter your email address and name below to be the first to know.