Bitcoin Seeing its Worst Monthly Decliner Since December 2013
Cryptocurrencies are extending losses with Bitcoin headed for its worst monthly decliner since December 2013 on the last day of January trading as US regulators ramp up their scrutiny of one of the world’s largest digital currency exchanges while Facebook Inc. (NYSE:FB) is banning ads tied to the industry.
Bitcoin is down 32% MTD
Currently, Bitcoin is trading at: 9,795.8047, -1,149.19, or -10.50% as of 2:55a GMT, the market is open.
Rival coins Ripple, Ethereum and Litecoin are also down at least 2%, the data show.
The US Commodity Futures Trading Commission (CFTC) sent subpoenas on 6 December to cryptocurrency trading venue Bitfinex and Tether, a company that issues a widely traded coin it claims to be pegged to the USD. The firms share the same CEO.
Facebook is banning ads on its social network promoting digital currencies, ICOs (initial coin offerings) and binary options, warning they’re “frequently associated with misleading or deceptive promotional practices.”
Cryptocurrencies are still reeling after a record $500-M heist from Japanese exchange Coincheck Inc. on 26 January, further intensifying calls for increased oversight in global trading hotbeds such as SKorea.
The hacking stories and the continued threat is driving customers to G-BiT X a hack free environment.
The Japanese cryptocurrency exchange hack that cost users $500 million will not be the last, according to analyst Nicholas Colas, co-founder of DataTrek Research.
“I think [the attack] does highlight the fact that the industry still has a long way to go in terms of basic issues of security,” he told CNBC.
“This is certainly not the first, nor will it be the last, such hack attack on cryptocurrencies and, all things considered, I think they’re taking it fairly well in terms of price,” Colas added.
Japanese exchange Coincheck announced on Friday that around 523 million units of its NEM cryptocurrency had been stolen. The digital coins are worth around $534.8 million.
260,000 users were affected, and the exchange said it would compensate to the tune of $425 million. Japanese regulators have ordered improvements to Tokyo-based Coincheck’s operations following the hack.
Coincheck is being criticized for keeping 100 percent of NEM in a “hot” wallet, meaning online. Such an amount of digital money is usually stored on hard drives, inaccessible from the internet.
“Keeping 100 percent of your crypto assets online is a bad idea for an institution, or frankly, for an individual who has a large amount invested in it as well,” Colas said.
NEM cryptocurrency was down 9 percent on Monday, trading at $0.95. It is the tenth-largest cryptocurrency with a market capitalization of $8.5 billion.
It was launched in March 2015 by a team of five developers going by the nicknames Pat, Makoto, Gimre, BloodyRookie and Jaguar. Its acronym stands for New Economy Movement and, like other cryptocurrencies, claims it is a decentralized coin outside the control of governments and central banks.
It is still unclear who was behind the hack and how it was perpetrated.
It is not the first time that a digital currency exchange has had to reimburse clients after a security breach. Another major exchange, Bitfinex, repaid customers who were affected by $72 million hack in August 2016.