Crypto Price Check: Bullish Moves Amid Regulatory Pressures

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Cryptocurrency prices have recently risen as regulators seek to clamp down on the industry.

Bitcoin (~BTCUSD) rose slightly to $20,840.92 on January 19, according to data firm CoinGecko. Ether, the native currency of the Ethereum blockchain, added nearly 1% to $1,535.80, while dogecoin was steady at $0.081013.

“The crypto market has seen its largest gains in recent months, reaching nearly $1 trillion in total market capitalization,” said Billy Endres, a cryptocurrency expert at Finder. “The bullish turn was led by Bitcoin and Ethereum, with the two major cryptocurrencies gaining +20% since the new year.”

Endres said there has since been a minor retracement, with Bitcoin trading at around $20,700 and Ethereum holding above $1,500.

“However, this setback is to be expected,” he said. “As is often the case during periods of bullish momentum, traders choose to take profits on larger market cap cryptos and diversify into altcoins.”

Crypto sentiment is mixed

Altcoins are considered all cryptocurrencies other than Bitcoin and Ether.

Endres said if Bitcoin and Ether support remained strong at key levels, capital would likely flow into altcoins, which could lead to significant upside moves.

“While things look positive, the sentiment is mixed,” he said. “Some traders say this is just a bullish trap and the downtrend will resume soon.”

On the regulatory front, Winston Ma, an assistant professor at New York University School of Law, said the US legal crackdown on crypto – particularly from the Securities and Exchange Committee – is intensifying.

On Jan. 12, the SEC charged Genesis Global Capital and Gemini Trust with the unregistered offering and sale of securities through the Gemini Earn crypto asset lending program, which Ma said “resulted in huge losses for the customers”.

According to SEC Chairman Gary Gensler, they violated securities laws by failing to meet “disclosure requirements designed to protect investors.”

“With high-profile precedents like this, federal securities laws are likely to be more broadly and actively enforced in the cryptocurrency world than ever before,” said Ma, author of Blockchain and Web3: Building the Foundations of Metaverse Cryptocurrency, Privacy, and Security. “

“It could be a big moment, as regulators close in on some of the biggest names in the crypto asset markets,” he added. “SEC enforcement actions will set the tone for cryptocurrency regulations in 2023, as crypto-related legislation is still not immediately visible.”

Big names caught up in the FTX scandal

The FTX scandal has kept regulators busy as they prepare their case against Sam Bankman-Fried, the disgraced founder of cryptocurrency exchange FTX, who faces a series of criminal and civil charges.

Tom Brady and his ex-wife Gisele Bundchen were both ambassadors and shareholders of FTX, according to a court document. The former star couple promoted the cryptocurrency exchange in several advertisements.

Billionaire Dan Loeb, through his hedge fund Third Point LLC, also owned a significant number of shares of Bankman-Fried empire entities.

David Lesperance, immigration managing partner and tax advisor at Lesperance & Associates, said that “while the public has enjoyed the exit of various celebrities and high-profile investors from FTX, the bankruptcy courts have granted a temporary stay of three months to FTX account holders”.

“However, account holders at companies like FTX or Celsius would be better off using this kind of reprieve to get their tax house in order,” he said. “Any previous illusions about ‘privacy’ or ‘secrecy’ in crypto are destroyed in a bankruptcy because under bankruptcy laws those who lent their crypto out will be publicly named as ‘creditors.’ This will happen whether they like it or not.”

Lesperance said that if the crypto holder failed to properly comply with their jurisdiction’s tax laws because they mistakenly thought it was “secret”, then the tax authorities would find out and take appropriate action ranging from the audit to the accusation of tax evasion.

“It’s true, even if they lost everything, that is to say an injury on top of the insult,” he said.

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