Bitcoin Sinks Below $23,000 as Crypto Regulation Scrutiny Intensifies

Bitcoin (BTC) is again under pressure as the leading cryptocurrency briefly sank to a four-week low of $22,408 on Thursday morning before climbing back to prices of around $22,715 by press time, according to CoinGecko.

Today’s drop comes after Bitcoin’s convincing performance in January, which saw BTC soar almost 40% since the start of the year, raising investors’ expectations for a renewed bull run.

The latest price action also saw Bitcoin shed about $10 billion in market capitalization, which fell to $437.9 billion at the time of writing from $$448 billion on Wednesday. The world’s largest cryptocurrency currently accounts for 39.4% of the market, followed by Ethereum’s 17.7% share of the pie.

The industry’s second-largest cryptocurrency lost 2% over the day, currently trading around $1,640.

Other major cryptocurrencies, including Binance Coin (BNB), Cardano (ADA), and Dogecoin (DOGE) are following a similar price trend, with daily losses being in the range between 2% and 3.5%.

Regulators ramp up crypto scrutiny

Today’s market drop comes in the wake of the reports of the U.S. Securities and Exchange Commission (SEC) investigating popular cryptocurrency exchange Kraken for alleged securities laws violations.

While Kraken declined to comment on the subject, Bloomberg cited an unnamed person familiar with the matter who claims that the probe is at an “advanced stage” and “could lead to a settlement in coming days.”

In an almost simultaneous development of events on Wednesday, Coinbase CEO Brian Armstrong took to Twitter to deliver a lengthy thread on what he called “rumors that the SEC would like to get rid of crypto staking in the U.S. for retail customers.”

“I hope that’s not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen,” he said.

According to the Coinbase CEO, “staking is a really important innovation in crypto” as it “allows users to participate directly in running open crypto networks” and “brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprints.”

Taking aim at unclear regulations, the Bank of New York Mellon’s head of digital assets Michael Demissie said on Wednesday that “we absolutely need clear regulation and rules for the road. We need responsible actors who can offer reliable services that live up to investors’ trust.”

Speaking at Afore Consulting’s 7th Annual FinTech and Regulation Conference, Demissie said he is convinced that cryptocurrencies are “here to stay,” adding that “it’s important that we navigate this space in a responsible way.”