Cryptocurrency
Crypto business in the U.S.: Companies are leaving the U.S. due to repression
The crypto business in the U.S. has fallen under severe pressure. The U.S. is actively pursuing a crypto-business, which has a negative impact on the investment and business climate in the industry. That’s according to a Bloomberg study.
Now Singapore, Hong Kong, Europe and Dubai are more attractive for cryptocurrency companies. Regulation of cryptocurrencies in the U.S. seriously affects the plans of many projects. More than a dozen executives, former regulators, investors and analysts surveyed by the publication concluded that these regions have clear regulations, tax incentives and a loyal government. Some jurisdictions, such as Dubai and Singapore, also offer favorable tax rates, making them more attractive to crypto entrepreneurs and investors. All this prevents the growth of the BTC exchange rate.
Company representatives decried “regulation by enforcement” in the U.S., where authorities have cracked down on rule-breaking activities rather than passing new laws specifically for digital assets.
“The growing level of regulatory scrutiny and enforcement is making the U.S. crypto-business and crypto-investors nervous. Those who are interested and want to stay in cryptocurrency will choose friendlier countries where the rules are clear,” said Zhuling Chen, CEO and founder of RockX Singapore.
Some investors and crypto influencers believe that the Securities and Exchange Commission has decided to have a “night of the long knife” in the industry.
Within just a week, the Securities and Exchange Commission (SEC) took a series of actions. On February 9, the agency recovered $30 million from cryptocurrency exchange Kraken, forcing it to shut down its speaking program in the process. A few days later, the SEC said it intended to sue stablecoin issuer Paxos, which eventually announced it was shutting down one of its stablecoins.
The SEC also decided this year to make the crypto industry its priority. Each year, the Commission selects key areas that it believes pose potential risks to investors and the integrity of U.S. capital markets. By keeping an eye on the latest trends in the industry, the SEC will be better able to identify potential dangers to both investors and markets.
We previously reported that the crypto business in the U.S. could lose access to hedge funds.
Cryptotraders had a tough day: almost 68,000 positions were liquidated on exchanges in the last 24 hours, and the total volume of liquidations exceeded $257,000,000. All this happened against the news of the US Federal Reserve’s rate hike and another Securities and Exchange Commission regulatory action against cryptocurrencies.
Cryptotraders lost $132,000,000 in BTC
Bitcoin, Ethereum, and Ripple were the leaders in the number of forcibly closed positions. BTC liquidations totaled almost $132,000,000; Ethereum traders lost $51,000,000. XRP positions accounted for about $8,000,000 of liquidations. Bitmex exchange executed the largest order of $7.39,000,000.
Cryptocurrency market capitalization has declined 2% in the last 24 hours, but is still above the $1 trillion mark.
The weekly CoinShares report also recorded a massive outflow of funds for six consecutive weeks. During that period, nearly $500,000,000 was withdrawn from cryptocurrency platforms, with $113,000,000 coming from bitcoin. Analysts at the company believe the outflow is due to liquidity needs during the banking crisis rather than a negative outlook. The company mentions that a similar scenario was seen in March 2020 amid a COVID-19-induced panic.
Regulators continue to hunt the cryptobusiness
Another reason for the increased volatility in the market has been harsh action from U.S. regulators. Last night it became known that the U.S. Securities and Exchange Commission sued cryptomagnate Justin Sun, accusing him of fraud and market manipulation.
The SEC also issued a notice of wrongdoing against Coinbase, the largest U.S. cryptocurrency exchange. The securities regulator sued Coinbase Global Inc, for some of the products it offers.
We previously reported that Bitcoin (BTC) tests $28,000, but onchain metrics urge caution.
Employees of the cryptocurrency exchange Binance help clients from China to bypass compliance and verification. CNBC writes about it, citing hundreds of corporate emails from exchange employees on Discord and Telegram. It is reported that Binance has helped over 200,000 users register, bypassing its own security system. One case describes correspondence between a user from China and a Binance employee.
The employee under the pseudonym yaya.z suggested the user from China turn on a VPN, register as a Taiwanese resident and then return the location to China. Binance employees also advise customers not to use VPN services from the U.S., Hong Kong and Singapore, because the exchange does not provide services in those regions, writes CNBC. At the same time, Binance freely processes applications from U.S. email providers like Gmail or Outlook for registration.
The exchange even offers specialized mobile applications for customers from China. A CNBC reporter could download a special mobile application from Binance via email. At the same time, no VPN was needed to download the app, as the download was conducted through the domain of binance[.]com. It is also alleged that the exchange still verifies users with Chinese phone numbers.
An exchange spokesperson denied the existence of a special Chinese version of the mobile application. The exchange also added that it has improved the system to identify users from banned regions. CNBC notes that after providing evidence, Binance removed employee messages from corporate chats to circumvent KYC.
We previously reported that the Ethereum (ETH) price crossed the $1,800 mark, opening the way to $2,000.
The market remains in a bearish trend and bitcoin (BTC) will resume its fall and test $16,000. There are two reasons:
The first statement can be confirmed or disproved by a technical analysis of the cryptocurrency market, but there is not enough additional information for the second.
The market capitalization of altcoins (ALTCAP) does hold nearly $605 billion of resistance. Although ALTCAP has risen above it several times, it didn’t develop above this area.
However, the daily RSI has broken through the bearish divergence trendline (green line). Such a breakout often precedes significant reversals into a bullish trendline. As a result, ALTCAP will move higher towards the $680B resistance area. If not, ALTCAP could fall back to the $518B support area.
There are also those who argue that bitcoin will test the $10000-$11000 area because there is a CME price gap that needs to be filled. The gap refers to the difference between the closing price of bitcoin futures on the Chicago Mercantile Exchange (CME) on Friday and the opening price on the following Monday.
We previously reported that Hong Kong has allocated another $50,000,000 to the crypto industry.
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