Shortly after topping $5,000 (according to several exchanges), Bitcoin began to tumble dramatically - now down almost $500 - erasing all the post-North-Korea missile anxiety gains.
Ethereum has crashed even more.
In fact, 9 of the 10 largest cryptocurrencies are all plunging this morning...
While there is no specific catalyst for this drop, two events have been cited: in the US, regulators have begun officially cracking down on ICOs.
It's starting. pic.twitter.com/ZpfW8Kb9jT— BitCrypto'ed???? (@Bitfinexed) September 1, 2017
Meanwhile, one of the world's largest bitcoin exchange, Shanghai-based BTC China, announced it had suspended ICOCoin deposits as well as trading and withdrawals, starting 6pm on Sunday, while Caixin reports that authorities shut down a blockchain conference over the weekend on concerns unregulated Initial Coin Offerings were being used to raise funds illegally, adding that Chinese market regulators have begun cracking down on ICOs as "illegal fundraising vehicles" in disguise, and in taking a page out of the SEC playbook, will soon issue official rules on ICOs.
As CoinTelegraph adds, the self-regulatory group National Internet Finance Association of China warned its members about the dangers in participating in initial coin offerings (ICO). The group claimed that ICOs could be using misleading information as part of fundraising campaigns. In a statement in late August 2017, the online finance organization further warned its member companies to exercise extreme caution when dealing with the new fundraising mechanism. Part of the statement reads:
"China Internet Finance Association members should take the initiative to strengthen self-discipline, to resist illegal financial behavior."
The National Internet Finance Association of China was created by the People’s Bank of China in 2016 to serve as a partner of government agencies in tackling regulatory issues and developments. The group has more than 400 members that include financial institutions such as banks, securities companies and consumer finance firms, as well as other organizations like guarantee companies, Internet peer-to-peer firms and credit services. Among the companies were peer-to-peer wealth management firm CreditEase, Lufax and Wangxin.
At the same time, the PBOC has been strictly monitoring the operations of ICOs lately. As part of its scrutiny, the central bank is drafting regulations that could mandate the suspension of all ICO activities in the country.
Based on the proposed rules issued by the Legislative Affairs Office of the State Council, digital currency-based funding activities are possible targets for investigations.
The draft also outlined that an interdepartmental committee shall be created by the government to fight or stop illegal fundraising. It clarified that all participants of such activities shall be responsible for their own losses.
Meanwhile, several local ICO projects seem to be taking precautionary measures. One of them is the ICO website ICOINFO, which announced the temporary suspension of its activities due to regulatory uncertainties whereas companies such as NEO tend to be regulatory-friendly and likely to benefit from stricter rules.
Similarly, over in Russia, an official for Russia's national legislature said that new laws regulating the exchange of cryptocurrencies will be complete by the end of the fall. Anatoly Aksakov, who leads the State Duma's financial markets committee, told Russian media this week that next steps involve the formation of a dedicated working group to address the issue. Further, he said that he would be meeting with officials from Russia's central bank and the Ministry of Finance in the coming days.
So as cryptos increasingly attract more regulatory attention, at least today the marginal "weak hands" appears to be selling, although with virtually all cryptos hitting new all time highs as recently as yesterday, this may well be just the latest corrective pause that takes the "cryptocoin" space to new all time highs.