News that the US Securities and Exchange Commission (SEC) will require of digital currency trading platforms to register as exchange operators sent the prices of Bitcoin and other cryptocurrency spiraling downward.
Bitcoin lost 11% immediately after the announcement of tighter regulation and traded at $9,481.45, before bouncing to $10,097 at 5:30 p.m. EST. The cryptocurrency was trading at $9,809 as of 2 a.m. EST after losing 8.65% over the past 24 hours, data from CoinMarketcap showed.
The SEC said in a public statement:
“If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.
The regulator added:
"The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not. Many platforms refer to themselves as 'exchanges,' which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange."
The statement quickly triggered fears of impending regulations. Almost all Bitcoin rivals also shed value, with Cardano posting the highest losses among the top 10 cryptocurrencies after plunging by 16.32% during the 24-hour period ($0.231581). Ethereum and Ripple also retreated, losing 7.40% ($745.64) and 6.85% ($0.854373), respectively.
The rest of the top 10 club suffered declines ranging from 5% to about 12%.
McAfee says SEC is panicking over digital currencies
The SEC statement drew a strong reaction from cryptocurrency bull John McAfee, who described the agency in a tweet as running scared of virtual currencies.
My response to today's action by the SEC. I predicted that they, in panic at losing their power, would blindly strike out. I also predicted that I would be one of their targets. Rumor has it that I was correct. pic.twitter.com/8oF2H9K0eZ— John McAfee (@officialmcafee) March 8, 2018
The SEC’s latest move comes as a surprise given that the regulator told members of Congress last month it was proactively monitoring the cryptocurrency space.