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The price of bitcoin slipped yesterday following news that the U.S. Securities and Exchange Commission (SEC) was investigating the crypto market.
In a report from CNBC, citing information from the Wall Street Journal, the SEC had reportedly issued a number of subpoenas in order to gather information from tech companies and advisors linked to the cryptocurrency market. In particular the agency is looking into initial coin offerings (ICOs) and how they are structured. Unlike public offerings, ICOs aren’t heavily regulated, the report stated.
As a result, bitcoin saw its price drop from above $11,000 yesterday to $10,358 into the early hours of trading Thursday, according to CoinMarketCap. It has since rallied back, and at the time of publishing was valued at $10,739.
The news comes at a time when there is heightened attention being focused on the crypto market. At the end of December, bitcoin saw its price rise to within touching distance of $20,000 for the first time amid increasing investor trade.
Since then, however, prices have dropped – bitcoin was valued at just above $6,000 at the beginning of February – with many describing the market as a bubble. It is because of these wild swings that concern among regulators has been voiced with many authorities calling for the market to be regulated.
This isn’t the first time that the SEC has turned its attention to the digital currency market. In a January statement, Jay Clayton, chair of the SEC, said that even though agencies were ‘pursuing violations’ there was a ‘substantial risk’ that it would be unable to recover lost investments to traders.
In a statement from December, Clayton wrote:
A number of concerns have been raised regarding the cryptocurrency and ICO markets, including that, as they are currently operating, there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation.
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