Welcome to our next “Weekly what changed in crypto”. We are dedicating it to share the most important stuff according to us we’ve seen previous week in the crypto world.
Enjoy it every Monday morning!
Whole week major drivers
That was another hard week for crypto. We have seen much bad news for crypto, which resulted in limiting demand and buy side from one side (e.g. facebook ads ban, blocking buying by credit cards) and were pushing prices down by adding uncertainty ( suspicions of the insolvency of Tether).
Further, credit cards blockade only increased price falling, because many US-based customers were not informed about that upfront. So they were buying during last 3–4 days, but transactions were blocked later. It will take few days until people switch from credit cards to debit cards or bank transfers. Which operate normally.
After getting off to a blistering start in 2018, cryptos crashed for the second week, with the market cap falling to almost $344,000,000,000. It is the worst weekly decline since June-July 2017. This week having diversified portfolio didn’t help because almost all coins felt in similar way. Ranging drops from 30 to 50%.
Weekly drop in almost all coins and tokens (coin360.io)
Most important events
Banks ban on buying using credit cards
Customers of J.P. Morgan Chase, Bank of America and Citigroup can not buy cryptocurrencies using credit cards, as reported by CNBC, February 3. J. P. Morgan Chase confirmed to CNBC on January 25 that he made it possible to buy cryptocurrencies, but the policy was quickly reversed. Citigroup also stated that it no longer allows card purchases and it will review its policies in future, while Bank of America also reduces the purchase of cryptocurrencies by credit cards in anticipation of policy reviews.
Ban on crypto-ads on Facebook
Facebook is banning all ads that promote cryptocurrencies to prevent people from advertising financial products and services frequently associated with misleading or deceptive promotional practices. No advertiser (even those with legal businesses) will be able to promote cryptocurrencies, ICOs or binary options. Ads violating this new policy will be banned on Facebook and in all the other places where Facebook sells ads (Instagram, Audience Network). Entrepreneurs and investors argue that this move unfairly punishes legitimate cryptocurrency companies and related crypto products.
Bitfinex, Tether in the spotlight
World’s largest cryptocurrency exchange, Bitfinex and Tether, a token used by this and many other exchanges are scrutinized by the U.S. Commodity Futures Trading Commission (CFTC). On 6 December the CFTC sent subpoenas to Bitfinex and Tether requesting an explanation and during this week story was covered in Bloomberg. Tether is claimed to have all of its coins backed by U.S. dollars (1:1 exchange rate). However, specialists question the accuracy behind assertions that every tether is supported by actual bank reserves.
AriseBank ICO assets freeze
The U.S. Securities and Exchange Commission announced it has obtained a court order to halt and freeze the assets of probably the largest initial coin offering ever. AriseBank wanted to rise $1 billion within two months. An emergency asset freeze was approved by the court. SEC has appointed a third-party custodian to secure the firm’s cryptocurrency holdings (bitcoin, litecoin, bitshares, dogecoin and bitUSD).
South Korea bans anonymous bank accounts
South Korea bans using anonymous bank accounts in cryptocurrency trading. This move is aimed at stopping virtual coins from being used for money laundering etc. Every holder of an anonymous account will have to link it with a real bank account in their own name. The requirements are similar to those in the US. Underage investors and foreigners will also be banned from opening cryptocurrency accounts in SouthKorea.
India limits cryptocurrency money spending
Finance minister Arun Jaitley stated that the government will do everything to discontinue the use of Bitcoin and other virtual currencies as a mean of payments in India. He said that India does not recognize them as legal tender and will encourage blockchain technology in payment systems. However, probably Indian exchanges will still be legal and there will be no problem with cryptocurrency trading.
Our next “What changed in crypto” is due on February 12th, 2018