Bitcoin forfeits weekly gain as regulator orders changes - TechCentral

Bitcoin forfeits weekly gain as regulator orders changes

Bitcoin dropped the most in more than a week and led digital coins lower after Japanese regulators hit six of the country’s biggest cryptocurrency trading venues with business-improvement orders.

The crackdown surprised investors and ended what was about to be the first winning week since early June for the most-liquid digital coins. The MVIS CryptoCompare Digital Assets 10 Index tumbled as much as 7.1% on Friday. The index fell in five of the past six weeks.

Some of the targets were quick to react. Bitflyer said it would stop accepting new customers and also review identity verification for some existing users after it received an order from Japan’s Financial Services Agency. The FSA called for improved measures at all the exchanges against money laundering. The companies must submit their plans by 23 July.

Peer-to-peer money has come under fresh pressure in recent weeks after two South Korean exchanges said they were hacked. That raised fresh concerns about the security of investor holdings. New pressure in Japan, one of the most crypto-friendly jurisdictions, demonstrated the market’s fragility to regulatory moves in the absence of much positive news.

“The market is still trading on low volumes and has yet to break out of its current downtrend, leaving itself susceptible to sell-offs,” said Ryan Rabaglia, head trader with cryptocurrency dealing firm Octagon Strategy in Hong Kong, in an e-mail. “Although the market reacted negatively, I view this as a positive for the industry as a whole.”

Bitcoin, the largest cryptocurrency, sank as much as 6.3% and was trading at US$6 347 at 11.37am in London, according to consolidated Bloomberg pricing. It has lost about 56% this year. Ethereum and litecoin both retreated at least 7%.

Quoine, Bitbank, BTCBox, BITPoint Japan and Tech Bureau were the other exchanges penalized by the FSA. While Japan created a regulatory framework for exchanges last year that proved a lure for bourses, the $500-million heist in January at Coincheck prompted the country’s regulators to increase scrutiny of the industry.

‘We deeply apologise’

In April, bitFlyer tightened its anti-money laundering rules after the Nikkei newspaper reported that users could perform some limited functions without fully completing customer verification.

Yuzo Kano, bitFlyer’s CEO, apologised on Friday for the FSA sanctions. “We deeply apologise for causing concerns and inconvenience,” he said in a tweet. “We take this order seriously and will make all efforts to improve our operations.”

Transactions on bitFlyer averaged about $2-billion/day during late April and early May, thanks in large part to bitcoin margin contracts popular with Japanese day traders. The venue had two million users.  — Reported by Eric Lam and Todd White, with assistance from Yuki Hagiwara, (c) 2018 Bloomberg LP

Comments are closed.

© 2009 – 2019 NewsCentral Media