In this article we will see why is crypto down today by looking at recent evidence and facts.
Over the past five days, crypto assets have been under sustained attack by the SEC: a collapse today was likely.
Summary
Why is crypto down today? Victims and survivors of the collapse
Of the top thirty cryptocurrencies by market capitalization only Tron (+0.45%), Aptos (+5.68%) and Hedera (+1.83%) are escaping the collapse.
Bitcoin loses 1.09% and falls to €20,270.96 as does Ethereum which falls to €1,401.25 (-1.69%) but the worst is BNB (-7.58%).
BNB records the worst fall today due to the attack made by the SEC against it as we will see below.
SEC vs crypto
For five days now, the crypto sector has been suffering the onslaughts of the SEC, which by the sound of lawsuits seems to want to have more power over this asset class.
The SEC wants to change what it says makes the digital currency asset “outlawed.”
Staking, some exchanges and certain tokens do not meet the SEC’s stringent regulations, and so the lawsuits are multiplying.
Not only Binance, but also other exchanges such as Kraken have been the beneficiaries of the subpoena notice.
In addition to the missives from the US Securities and Exchange Commission come the words of the regulator’s chairman Gary Gensler.
Gensler, has always been a scholar of the crypto world which he considers an interesting asset but one that needs to be “formed.”
The chairman intervened by taking a cue from one of the most well-known mottos of the crypto world saying:
“There’s an expression in crypto: not your keys not your crypto.”
The phrase uttered in a YouTube video on the official channel of the American regulator was later explained by the executive.
Gensler condemns the tool of staking provided by these financial intermediaries.
According to the SEC Chairman, giving one’s savings to an intermediary for “management” is illegal.
The problem is ownership of value, and whoever implements staking also sets up an unregistered investment contract.
The Paxos case
Paxos Trust Co. is in a showdown with the US Securities and Exchange Commission.
The regulator of the US economic system has sued Paxos for fraud.
For the SEC, BUSD would be an unregistered security, and thus outlawed.
The SEC is seeking the registration of BUSD through legal channels, and meanwhile both Binance and the stablecoin are suffering the consequences.
Binance is involved as it is accused of privileging the token on the platform, but to date it has not been notified by the court.
Meanwhile, in their darkest hour, crypto are once again showing their heart.
Some NGOs are using cryptocurrencies to raise funds for Turkey’s earthquake victims.
More than $2 million raised by Avalanche, BSC and Ethereum in a fundraiser by singer Haluk Levent through the Ahbap entity.
Binance itself stands as a champion of solidarity just as it is in the crosshairs of the SEC.
$5 million donated by Binance through deposits of $100 in BNB for each Turkish user.
Interestingly, 42% of the total donations to the victims of the Turkish catastrophe came in various stablecoins, primarily BUSD which is at the center of the SEC storm.
US CPI data: today we may see a further crypto collapse
Today the US CPI data for January will be published at 2:30 PM (CET).
Inflation data have historically always affected the performance of cryptocurrencies.
Analysts believe that unexpected or worse-than-expected data could sink the entire sector already under attack.
Meanwhile, crypto is experiencing an already bad day with very little trading.
