The Ledger: Bitcoin drops below $19,000 again, while Three Arrows goes to the wall

This week opened with Crypto hedge fund Three Arrows being ordered into liquidation by a British Virgin Islands (BVI) court after it was hit hard by the $2trn crash in crypto assets.

Advisory partners from Teneo have been appointed to handle the liquidation, and potentially find buyers for various parts of the business.

Three Arrows’ liquidity crunch is just one of a series of crises that have been sparked by the massive downturn in the crypto sector this year, and with its fall came another tumble in the price on Bitcoin (BTC).

According to Coin Metrics, BTC has been trading 6% lower at $18,930.00. It is down roughly 58% this year, having plummeted more than 70% from an all-time high of $68,990.90 in November.

This hasn’t put everyone off crypto, El Salvador’s president Nayib Bukele has taken it as a sign to invest, purchasing at 80 BTC at the low price of $19,000 each.

This is despite continual warnings by the  International Monetary Fund that using BTC as legal tender will ultimately lead to massive financial insecurity.

Elsewhere, the European Union has finally settled on its landmark Markets in Crypto-Assets (MiCA) framework, which is the first specific crypto law of its kind.

It has been billed by French Minister for the Economy, Finance and Industrial and Digital Sovereignty Bruno Le Maire as legislation that “will put an end to the crypto wild west”.

It is expected to act as a blueprint for similar regulation elsewhere and sets out a single regulatory position on issuers of unbacked crypto assets, stablecoins, trading platforms and wallets.

Despite the emerging regulatory grasp of the industry, a recent ‘CryptoSprint’ held by the UK’s Financial Conduct Authority led to a backlash from crypto advocates, who argued that decentralized finance should not be regulated.

The event, which was held in May, saw 184 participants from different countries discussing the future of the industry and how it should be regulated.

If that hadn’t ruffled enough feathers, the US Securities and Exchange Commission (SEC) chairman Gary Gensler has also worried the Ethereum community by not overtly categorising it as a commodity.

The classification of cryptocurrencies as either a security or a commodity has a knock-on effect to how they are regulated, and by whom.

Gensler said: “Some, like bitcoin – and that’s the only one, Jim, I’m going to say, because I’m not going to talk about any one of these tokens, my predecessors and others have said – they’re a commodity.”

Which ultimately means, BTC has the potential to come under the regulation of the Commodity Futures Trading Commission, while all other tokens would fall under the harsher regulation of the SEC.

It’s never a dull moment in the world of crypto but if you want relax away from the drama, we recommend you visit: 1xBit, FortuneJack, and Bitcasino.

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Written by Hannah

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