Almost a quarter of the total market value of cryptocurrencies generated in 2017 was wiped out in a single month.
January recorded a $ 44 billion total loss in Bitcoin and rival cryptocurrencies, according to Bloomberg, making it the biggest one-month loss in recent financial market history.
Most of the month’s sharp declines were triggered by government actions, particularly in Asia.
Since the introduction of Bitcoin, future contracts have pushed the price of Bitcoin to $ 19,000 in early December, financial regulators around the world are nervously monitoring the digital currency space, eager to understand its impact on the traditional financial system. . Several countries have introduced concrete regulations to tame investor mania and have formed forces to tackle high-profile criminal activity involving digital currency.
Here are seven most notable government actions and major security breaches involving digital currency that contributed to the avalanche of the cryptocurrency market in January:
The Central Bank of Korea has formed a cryptocurrency research team
On January 11, Korea’s central bank, the Bank of Korea (BoK), has launched a special task force to explore the effects of cryptocurrency on the country’s economy, Coindesk reported. Earlier this month, Korea’s Financial Intelligence Unit and Financial Supervisory Service launched investigations in six banks regarding their involvement in money laundering activities using cryptocurrency.
Korea banned anonymous accounts on crypto exchanges
On January 15, Korean financial regulators demanded identity verification for all accounts traded on the country’s cryptocurrency exchanges. Exchanges that do not verify the identity of users face heavy fines.
Bulgaria dismantled major crypto ponzi scheme
On January 17-18, Bulgarian police raided the OneCoin office in Sofia, Bulgaria, CoinTelegraph reported. OneCoin was a multi-currency Ponzi scheme disguised as a decentralized token network. Participants were encouraged to sell educational materials using company tokens and to develop a downline sales network. The company was found to have no decentralized blockchain infrastructure to support the token transaction.
China cracked down on crypto ponzi schemes
China was already a forerunner in cryptocurrency regulation, leaving limited space for high-volume traders to disrupt the financial market within the country’s borders. And yet, in light of the OneCoin incident, Chinese Ministry of Public Security announced a plan January 19 to crack down on national Ponzi schemes.
Japan’s largest crypto exchange has been hacked
On January 26, hackers attacked Coincheck, Japan’s largest digital currency exchange office, and stole $ 500 million worth of NEM coins, the country’s traditional digital currency. Coincheck halted all trading activities following the incident.
In response, the Financial Services Agency of Japan publicly called for increased regulation and ordered the stock exchange to investigate the incident and submit a written report by February 13 with plans to prevent it. does not happen again.
US SEC crackdown on ICO fraud
On January 30, the U.S. Securities and Exchange Commission (SEC) obtained a court order to suspend an initial coin offering from a Dallas-based banking platform called AriseBank. The company aimed to raise $ 1 billion from retail investors. If it was finished, it would have been the biggest ICO to date.
Korea has detected major crypto black money
On the last day of January, Korean Customs detected an illegal $ 600 million foreign transaction involving undocumented cryptocurrency trading. On the same day, Korea’s finance minister announced tighter regulations on cryptocurrency exchanges. However, he said the government did not intend to issue an outright ban like China.