Bitcoin fell below US$17,000 in Thursday morning trading in Asia. The other top 10 non-stablecoin cryptocurrencies by market capitalization also retreated after the U.S. Securities and Exchange Commission Chairman Gary Gensler said the crypto industry is running out of time to comply with securities laws. He spoke on Wednesday in an interview with Yahoo Finance.
See related article: SEC’s Gensler says proof-of-stake cryptocurrencies may be securities
Fast facts
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Bitcoin fell 1.4% to US$16,847 in the 24 hours to 8 a.m. in Hong Kong, while Ether dropped 3.1% to trade at US$1,232 according to CoinMarketCap.
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Leading memecoin Dogecoin saw the biggest losses in CoinMarketCap’s list, falling 4.4% to US$0.095. Polkadot lost 3.7% to US$5.30. Litecoin also fell 3.7% to trade at US$76.96.
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Gensler said his agency had sufficient authority to begin holding digital asset firms accountable to securities regulation.
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Gensler said crypto exchanges and lending platforms need to come into compliance with those regulations. “They can do that appropriately, working with the SEC, or we can continue on a course with more enforcement actions, and I would have to say that the runway’s getting shorter,” he said.
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Gensler said that many crypto firms have been running co-mingled platforms offering lending, trading, hedge funds etc, and such practices will need to end.
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He did not specifically address the collapse of Bahamas-based crypto exchange FTX.com. It has been alleged FTX used customer funds from its exchange to trade crypto and make investments through its affiliated brokerage Alameda Research.
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Gensler said in September that any proof-of-stake cryptocurrency, such as the US$150 billion Ethereum network, should be considered a security.
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U.S. equities finished mostly lower on Wednesday. The Nasdaq Composite Index lost 0.5% and the S&P 500 Index finished 0.2% lower for its fifth consecutive day of losses. The Dow Jones Industrial Average was little changed.
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Investors see a recent run of bullish economic indicators conflicting with the comments of U.S. Federal Reserve Chair Jerome Powell last week, when he said the central bank may start to ease the pace of interest rate increases to slow inflation.
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U.S. services industry activity came in at 56.5% in November, according to the monthly survey by the Institute for Supply Management released on Monday. A reading of 50% or greater shows the economy is growing, while 55% is considered to be very strong. The U.S. jobs report out Friday showed the economy added 263,000 positions in November or more than the 200,000 expected.
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The Fed has increased interest rates since March to try to slow inflation, raising from near zero to a 15-year high of 3.75% to 4%, and has signaled that rates may end up exceeding 5%. The Fed has said it wants inflation in a target range of 2%. The consumer price index showed inflation was running at 7.7% in October, down from 8.2% in September.
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