On the heels of, perhaps, a foreshadowing of more regulatory oversight, bitcoin’s price staggered again on Wednesday (March 7).
Reuters reported news that the price of the marquee name in cryptocurrencies dipped as low as $9,450 in intraday trading when the Securities and Exchange Commission (SEC) announced there were “potentially unlawful” systems operating that allow the trading of cryptocurrencies. Bitcoin partially recouped those losses to trade in the afternoon at around $9,924.
The latest slip marked the lowest level in one and a half weeks of trading.
Specific to the warning, as Reuters reported in a separate article, the SEC said several online trading platforms should be registered with — surprise, surprise — the SEC itself.
Among the issues raised by the regulator, the SEC noted that investors may have faith and a sense of security triggered by the operating label of an “exchange.” But against that backdrop, the SEC said the platforms likely would need to be registered as regulated national securities exchanges or as alternate trading systems, said Reuters.
“The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not,” the agency said via statement. Some platforms do not, in fact, act like exchanges but offer services that, as Reuters said, “trigger other requirements,” such as the need to become a broker dealer or a clearing agent.
According to the SEC, platforms that offer trading of digital assets that, in turn, act like securities must register. SEC Head Jay Clayton has in the past given voice to his concerns over cryptocurrency trading and has said investors should be cautious.
Among the dozens of platforms that offer cryptocurrency trading, there was only one that could be identified by the newswire that had registered with the SEC as an alternative trading system: Liquidity M.