Cryptos Drop As Geopolitical Risks Compound Liquidity And Regulatory Risks

By RTTNews Staff Writer | Published: 2/18/2022 5:57 AM ET

Crypto markets struggled for momentum as a de-risking in the equity space spilled over rapidly to the digital asset spectrum. On Thursday, the U.S. stocks had recorded a massive sell-off amidst fears over the warlike situation in eastern Europe and the anxiety regarding Fed’s likely course of monetary policy tightening.

The unease regarding the increasing regulation and scrutiny around the crypto space, triggered by the strengthening of crypto enforcement apparatus at FBI and the Department of Justice too appears to have impacted the crypto market sentiment.

Bitcoin dropped to as low as $40,249.37 in the past 24 hours and is currently trading at $40,781.76, down 5.6 percent on an overnight basis. 63 Percent of BTC holders only are making profits at current prices.

Ethereum also declined to $2,861.85 and is currently trading at $2,917.70. Seventy one percent of ETH holders are making profits at current prices.

Bitcoin’s dominance of the overall crypto market is at 41.5 percent whereas Ethereum commands 18.7 percent of the crypto market. A recent report by Morgan Stanley’s wealth management unit had stated that Ethereum faces more competition in the smart contracts market than Bitcoin faces in the store-of-value market.

The decline in BNB (BNB), XRP(XRP), Cardano (ADA), Solana (SOL), Dogecoin (DOGE), Polkadot (DOT) and Crypto.com Coin (CRO) are less than the 4.6 percent decline recorded in the overall crypto market.

Avalanche (AVAX), Terra (LUNA),SHIBA INU (SHIB), Polygon (MATIC), Wrapped Bitcoin (WBTC) and Litecoin (LTC) have however declined more than 4.6 percent.

The U.S. Justice Department on Thursday announced the appointment of Eun Young Choi as the first Director of the National Cryptocurrency Enforcement Team (NCET), that would serve as the focal point for the department’s efforts to tackle the growth of crime involving digital assets and distributed ledger technologies.

The enforcement team would identify, investigate, support and pursue the department’s cases involving the criminal use of digital assets, with a particular focus on virtual currency exchanges, mixing and tumbling services, infrastructure providers, and other entities that are enabling the misuse of cryptocurrency and related technologies to commit or facilitate criminal activity.

The authority would also set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the department’s efforts to coordinate with domestic and international law enforcement partners, regulatory agencies and private industry to combat the criminal use of digital assets. Finally, the NCET would enhance the Criminal Division’s existing efforts to provide support and training to federal, state, local, and international law enforcement to build capacity to aggressively investigate and prosecute serious crimes involving cryptocurrency and digital assets in the United States and around the world.

The Justice Departmental release also announced the setting up of a new Virtual Asset Exploitation Unit at the FBI, consisting of a specialized team of cryptocurrency experts dedicated to providing analysis, support, and training across the FBI, as well as innovating its cryptocurrency tools to stay ahead of future threats.

NordVPN, a part of Nord Security, that specializes in online privacy and security, recently released the results of a survey conducted to gauge the general awareness about the dangers of crypto-related crime and cyberattacks. The survey was conducted among more than 1000 respondents in the U.S.

According to the survey, 7 in 10 Americans have security concerns about purchases made with cryptocurrency. In contrast, the remaining 3 in 10 said they don’t even know what to be concerned about (19%), or they do not have concerns (11%) about digital currency transactions.

68% of respondents were “aware” that there were risks involved with cryptocurrency whereas 32% of that group did not report any awareness of the associated risks. The risks that people reported awareness included hacking of trading platforms, systems, and exchanges (59%), account takeover (57%), phishing emails, calls, or texts alerting a change in funds (56%) and fake coin & system scams (51%).

In crypto good news from eastern Europe, Ukraine has legalized Bitcoin. The country’s parliament backed in final reading an updated bill to legalize bitcoin and cryptocurrencies. However, Bitcoin has not been accorded legal tender status.

The steep fall in the price of cryptocurrencies noticed overnight, to an extent reflects the lingering anxieties of an evolving crypto market place. While the tensions in eastern Europe may have exacerbated the nervous sentiment, global liquidity risks and global regulatory risks appear to be the prime fears haunting crypto markets.

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Article written by an RTT News Staff Writer, and posted on the RTT News.com website.

Article reposted on Markethive by Jeffrey Sloe