SEC Crackdown Sparks Crypto Carnage, Bitcoin Below $10k

Following a crackdown by SEC on "potentially unlawful Online Platforms for trading digital assets", Bitcoin and its crypto peers are tumbling...

Disappointment among Ripple holders last night with Coinbase is not helping but there is no clear catalyst for this most recent leg...


And Bitcoin is plunging back below $10k on heavy volume...


Some of the overnight headlines that weighed on crypto are:

Mt. Gox Trustee Sells 43b Yen Worth of Bitcoin, Bitcoin Cash

Mt. Gox trustee says it sold certain amount of bitcoin and bitcoin cash that belonged to the bankruptcy estate with the permission of the court to secure money for distribution resources.

Bitflyer Says It’s Experiencing Service Interruption

The Japanese cryptocurrency exchange has been experiencing an interruption to its services since around 3:10pm local time; “recovery efforts are in progress,” according to Twitter post.

Japan Looking to Penalize Some Cryptocurrency Exchanges: Nikkei

Japan’s Financial Services Agency is considering issuing suspension orders to some of the exchanges, the Nikkei newspaper reported, without citing anyone.

But this leg down at 1130ET is not related. It appears the following statement from SEC is driving the plunge...

Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

Divisions of Enforcement and Trading and Markets

March 7, 2018

Online trading platforms have become a popular way investors can buy and sell digital assets, including coins and tokens offered and sold in so-called Initial Coin Offerings ("ICOs").  The platforms often claim to give investors the ability to quickly buy and sell digital assets.  Many of these platforms bring buyers and sellers together in one place and offer investors access to automated systems that display priced orders, execute trades, and provide transaction data.

A number of these platforms provide a mechanism for trading assets that meet the definition of a "security" under the federal securities laws.  If a platform offers trading of digital assets that are securities and operates as an "exchange," as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.  The federal regulatory framework governing registered national securities exchanges and exempt markets is designed to protect investors and prevent against fraudulent and manipulative trading practices.

Considerations for Investors Using Online Trading Platforms

To get the protections offered by the federal securities laws and SEC oversight when trading digital assets that are securities, investors should use a platform or entity registered with the SEC, such as a national securities exchange, alternative trading system ("ATS"), or broker-dealer.

The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not.  Many platforms refer to themselves as "exchanges," which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange.  Although some of these platforms claim to use strict standards to pick only high-quality digital assets to trade, the SEC does not review these standards or the digital assets that the platforms select, and the so-called standards should not be equated to the listing standards of national securities exchanges.  Likewise, the SEC does not review the trading protocols used by these platforms, which determine how orders interact and execute, and access to a platform's trading services may not be the same for all users.  Again, investors should not assume the trading protocols meet the standards of an SEC-registered national securities exchange.  Lastly, many of these platforms give the impression that they perform exchange-like functions by offering order books with updated bid and ask pricing and data about executions on the system, but there is no reason to believe that such information has the same integrity as that provided by national securities exchanges.

In light of the foregoing, here are some questions investors should ask before they decide to trade digital assets on an online trading platform: 

  • Do you trade securities on this platform?  If so, is the platform registered as a national securities exchange (see our link to the list below)?   

  • Does the platform operate as an ATS?  If so, is the ATS registered as a broker-dealer and has it filed a Form ATS with the SEC (see our link to the list below)? 

  • Is there information in FINRA's BrokerCheck ® about any individuals or firms operating the platform?

  • How does the platform select digital assets for trading? 

  • Who can trade on the platform?

  • What are the trading protocols?

  • How are prices set on the platform?

  • Are platform users treated equally? 

  • What are the platform's fees?

  • How does the platform safeguard users' trading and personally identifying information? 

  • What are the platform's protections against cybersecurity threats, such as hacking or intrusions?

  • What other services does the platform provide?  Is the platform registered with the SEC for these services?

  • Does the platform hold users' assets?  If so, how are these assets safeguarded?

We encourage market participants who are employing new technologies to develop trading platforms to consult with legal counsel to aid in their analysis of federal securities law issues and to contact SEC staff, as needed.


pods hedgeless_horseman Wed, 03/07/2018 - 13:29 Permalink

If only Nethash would drop. Been looking into mining shitcoins as network hashrate skyrockets on all the popular alts.  Really sucks when Nethash and difficulty shoot up at the same time prices drop.  Oh well.  This is what I asked for to help reset things. Now if only the stupid "what to mine" sites would actually show some correct information maybe people might not dive in headfirst. My wife fielded a question about that the other day on fakebook.  Made the mistake of telling the guy we mine.  No matter what I said, he had his handy dandy profitability calculator and was gonna make bank.  Oh well.  I at least convinced him to set up a gaming PC and start that way.

Mining is a shitty, shitty thing to do. In fact, people should dump their rigs/cards on the market to get back something before it all collapses.  I would be helpful and take them off your hands.


In reply to by hedgeless_horseman

Peacefulwarrior FreeShitter Wed, 03/07/2018 - 12:03 Permalink

Why don't some of the trading geniuses on the ZH site write an article about the potential of the "Blockchain digital ledger technology" and what "Real" companies are investing capital into the development of it... like Microsoft and IBM?

Until Crypto Coins are backed by more than faith, regulated as a currency, have real scale and there is a pageant winner announced, they are an adrenaline filled amusement park ride (at moment)... if you got in early God Bless...


In reply to by FreeShitter

pods DillyDilly Wed, 03/07/2018 - 15:13 Permalink

I really wish we COULD get into discussions about cryptos. We almost did ~1 month ago with the tether issue.
But it seems as soon as a crypto article comes up out comes Who Flung Poo.

There are some real big time issues at hand with cryptos. Not merely the bubble/no bubble type stuff, but possible ways it might affect things downstream, etc.

Some crypto proponents aren't that much better though, tbh.  And then there is tmos's fan club that jumps on anything he says.

I really wish we could entertain some actual arguments and discussions about this stuff. I have real questions about the sector, and what might unfold. Like:  If P2P exchanges take hold, how would people move in and out of fiat, or would even P2P be people moving around within the sector?

Because if someone devises a cost efficient way to move in and out of crypto space, the sky's the limit. 


In reply to by DillyDilly

DillyDilly pods Wed, 03/07/2018 - 15:35 Permalink



I just pretty much IGNORE all the rhetoric (especially from no-coiners on ZH)... I do know the following:


1. Practically every day I read a dozen or more newsfeeds, press releases, etc. talking about REAL COMPANIES using blockchain & other models to streamline their business.

2. It's pretty clear by now that the banking sector is 'dipping their toe' into the space by way of buying exchanges, and creating trading platforms. (& we're talking names like CBOE & Goldman Sachs)... Clearly, it's not a joke to them.

3. Most of the FUD about 'profit/loss' accounting has been addressed at major exchanges thus far & 'compliance' seems to be the direction.

4. All 5 major cryptos have, if you study the technical analysis since the origin of the coin, adhered almost RELIGIOUSLY to well established technical parameters... It's hard to see if you're a rookie at TA (mostly, because rookies don't use log scales).


This all kind of reminds me of back in the late 80's when nobody knew Oracle or Intel, or anyone else from shinola... FFS ~ even then, all Apple had out was the NEWTON... Nobody had ever heard of e-mail, or the internet (let alone, Google, Amazon or Facefuck which didn't even get established until AFTER the fucking DOT.COM crash)...


At the end of the day, & FOR SIMPLIFICATION... I FOLLOW THE MONEY... Which was the purpose for my comment here within about CRYPTO TOTAL MARKET CAP... Ups? Downs? don't really interest me... If/When the TOTAL MARKET CAP drops under 100B, then I might start giving 'other thoughts' to the whole thing... If you're in it for any other reason, well, then yeah, you actually are trading tulips & beanie babies. (ever look at a LOG SCALE chart on MSFT or INTEL)?

In reply to by pods

Peacefulwarrior pods Wed, 03/07/2018 - 16:18 Permalink

Thanks and I understand. My point on the coin related portion of the Blockchain technology is The IRS can simply make a rule and that will be the end of the issue. Congress has introduced the Cryptocurrency Tax Fairness Act which requires the Treasury Department to issue guidelines for informational reporting on digital currency transactions for which capital gains is due. The agency will make the rules and those rules are sufficient as laws that carry criminal penalties. The interpretation belongs entirely to them and the courts will defer to them as the expert.

In reply to by pods

pods Peacefulwarrior Wed, 03/07/2018 - 20:06 Permalink

Yeah, I think that CONgress sees a way to get their meathooks in it, and (((they))) will always try and control anything that may or may not pose a threat (cryptos, liberty dollar, etc).
The Dec run up caught some attention of the wrong kind.
My only question is without coins, how can the blockchain be secured and decentralized. It leads to banker secured platforms, which doesn't really help us much.

In reply to by Peacefulwarrior

sessinpo lester1 Wed, 03/07/2018 - 13:08 Permalink

lester1 StackShinyStuff

IRS crackdown on you bitcoin tax cheats coming!

The IRS already subpoenaed Coinbase for records of customers!


Get over it. This is basically FUD and you probably don't even understand that.

So let the IRS get all the records. Let those that profited pay the thieving taxes like everyone else. Let those that took a loss write off what portion they can. The fact of the matter is that most often, the IRS can't account for all transactions of the more astute crypto trader. And the ones that aren't as astute, even with the software tracking programs, the IRS doesn't have the  capacity to handle everyone.

Most will simply pay the tax, which if they profited really isn't a big deal. It is only a big deal when the government screws you even more when you have taken a loss.

I made 6 figures last year off of crypto. I'll pay the taxes. I'm still better off. Now if I had lost thousands and the IRS had demanded payment on top of that, then we have a problem.

You comment is like saying "IRS demands all small businesses to pay taxes".


In reply to by lester1

Yellow_Snow StackShinyStuff Wed, 03/07/2018 - 15:34 Permalink

None of these 'issues' are particularly problematic...

'Mt Gox BTC sold' is past tense...  as in already sold...  GOOD (IT'S DONE WITH)

Japanese regulators trying to clean up exchanges and faulty practices...  GOOD

US regulators trying to clean up exchanges and faulty practices...  GOOD


In reply to by StackShinyStuff

Yellow_Snow StackShinyStuff Wed, 03/07/2018 - 21:03 Permalink

I filed an official SEC Complaint against several Crypto-exchanges 3 mos ago, notably Bittrex, and demanded regulations be enacted. 

Bittrex was dicking me over and froze my account for no reason...  No doubt, this is the response of that complaint...  strange thinking I might have had something to do with all of this. 

Regulating the exchanges can only be a good thing...  treat customers fairly.  That's why I filed 

In reply to by StackShinyStuff

DillyDilly LawsofPhysics Wed, 03/07/2018 - 12:21 Permalink

Most of what you need to know you can easily find here.


Just look at the top of the page to see the TOTAL MARKET CAP... Back in January, the TMC was somewhere around 720B... It dumped down to around 275B at the beginning of FEB, then retraced upwards... Right now it's around 403B, down from around 450B yesterday.


A few days ago, BTC failed at a 50% technical retracement of its own price range (top to recent bottom), so now, naturally, everything is getting dumped again until the technicals start all over from a lower base...


Naturally ~ the whole thing is punctuated with a lot of mouth breathing by the no-coiners & FUD articles...


Unless McAfee is your TA guide, the long term fundamentals for the top 5 cryptos are still very strong... BTC could still go down to 4k and they'd still be strong... In fact, (maybe I'm wrong, but I take this all as a sign that the 'bankers want IN')... Like Goldman buying Poloniex... As always, they want IN at a lower price (which every gold & silver stacker should know the ins & outs of very well).


All anyone needs to do is pull up a log chart of any of the top 5 cryptos to verify that exactly what I say is true... But I realize that it's easier just to junk my comment on a subject that any ad hoc person knows little about because Mama Boucher called cryptos:



In reply to by LawsofPhysics

DillyDilly Karl Marxist Wed, 03/07/2018 - 13:00 Permalink



I'm VERY tempted to BTFD even today, but there's a problem... I'm more of a fan of ETH & I don't own any BTC...


ETH is getting pressed down practically to the base of it's all time (log scale) trendline (factoring in ALL of its price corrections).


BTC isn't even close to those levels (& sadly, BTC tends to lead the way when FUD kicks in ~ which, really only occurred in the first place because it got technically extended during the month of December)... My best guess, going forward, is that we're gonna start see a serious 'arbitrage' game going on until BTC finds it's true base...

In reply to by Karl Marxist