Crypto Trading Venues Have Been Under Extreme Regulatory Fire

Exchange Stress One Of The Most Significant Factors To Weak Crypto Prices
Crytpo and Bitcoin Futures Story of Day

Crytpo and Bitcoin Futures Story of Day





Crypto Trading Venues Have Been Under Extreme Fire As Of Late With A Constant List Of Issues Facing Some Of The Largest Players - Exchange Stress Has Historically Been One Of The Most Significant Factors Contributing To Weak Crypto Prices

Nearly every major trading venue in crypto is experiencing some form of crisis. BitMEX, who hosts the World's most active BTC product, is under investigation by the CFTC around whether US-residents are using VPNs to skirt the platform's firewalls which bar their participation. Bitfinex, arguably the World's most important crypto-fiat onramp, while having dealt with the brunt of their fiat-issues in October to April, continue to battle a lawsuit brought by the New York Attorney General. Coinbase, the most important US-based crypto exchange, is now facing a negligence lawsuit from US regulators after their handling of the November Bitcoin Cash hardfork. Furthermore, they do not appear to have had much support from the courts who declined their request to settle the dispute in arbitration. Finally, the World's largest crypto/crypto platform Binance, yesterday appears to have fallen victim to a data hack which saw KYC information of 10,000 users released. This falls in already a difficult time for Binance where they just recently moved past a BTC hack and barred US IP addresses from participating on their exchange.

Key Takeaway: In crypto's young history, some of the sector's worst moments have come during periods of intense stress for important trading venues. Since the Mt. Gox hack in 2013/14 which nearly killed the industry, exchange stress has been a highly followed factor. While current exchange issues/trials are far from that magnitude of seriousness, another more recent precedent, such as Bitfinex's deposit/withdrawal frictions in late 2018 have seen high correlations with near-term price weakness.

About the Author

FRNT Financial is a technology and sales layer that offers institutional and accredited investors access to various forms of exposure to crypto-assets.