Bitcoin leads digital coins’ fall as regulator orders changes, Banking News & Top Stories

HONG KONG • 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 per cent last 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, which called for improved measures against money laundering at all the exchanges .

The companies must submit their plans by July 23.

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.

The new pressure in Japan 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 Mr Ryan Rabaglia, head trader with cryptocurrency dealing firm Octagon Strategy in Hong Kong.

“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 per cent and was trading at US$6,347 last Friday morning London time.

It has lost about 56 per cent this year. Ethereum and Litecoin both retreated at least 7 per cent.

While Japan created a regulatory framework for exchanges last year that proved a lure for bourses, the US$500 million (S$677 million) heist in January at Coincheck prompted regulators to increase scrutiny of the industry.


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