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While cryptocurrency prices have skyrocketed recently, regulators are considering cracking down on the sector.
Bitcoin (~ BTC USD) It rose slightly to $20,840.92 on Jan. 19, according to data firm CoinGecko. Ether, the native currency of the Ethereum blockchain, rose nearly 1% to $1,535.80, while Dogecoin was flat at $0.081013.
“The cryptocurrency market has seen its biggest gains in recent months, with a total market capitalization of almost $1 trillion,” said Finder crypto expert Billy Endress. and Ethereum led, with both major cryptocurrencies up +20% since the new year.”
According to Endress, bitcoin is trading at around $20,700, while ethereum is trading above $1,500, after a slight retracement.
“But this pullback is to be expected,” he said. “As is often the case during periods of bullish momentum, traders choose to profit from high-cap cryptocurrencies 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 remains strong at key levels, capital will likely flow into altcoins, which could lead to a significant rally.
“Things look positive, but sentiment is mixed,” he said. “Some traders argue that this is just a bullish trap and that the downtrend will resume soon.”
On the regulatory front, Winston Ma, an adjunct professor at the New York University Law School, said the U.S. legal crackdown on cryptocurrencies, especially by the Securities and Exchange Commission, has increased.
On January 12, the SEC charged Genesis Global Capital and Gemini Trust with offering and selling unregistered securities through the Gemini Earn cryptocurrency lending program, which Ma said “caused huge losses to clients. ‘ said.
According to SEC Chairman Gary Gensler, they violated securities laws by failing to comply with “disclosure requirements designed to protect investors.”
“With such high-profile precedents, federal securities laws may apply to the cryptocurrency world more broadly and aggressively than before,” said Blockchain and Web3: Building the Cryptocurrency, Privacy, and Security Foundations. Ma, author of the Metaverse, says: “
“This could be a big moment as regulators are closing in on some of the biggest names in the cryptocurrency market,” he added. SEC enforcement actions will set the direction of cryptocurrency regulation in 2023.”
Big names embroiled in FTX scandal
The FTX scandal has kept regulators busy preparing a lawsuit against Sam Bankman-Fried, the disgraced founder of the FTX cryptocurrency exchange, who is facing a string of criminal and civil lawsuits.
According to court documents, Tom Brady and his ex-wife Gisele Bündchen were both FTX ambassadors and shareholders. The former star couple promoted their cryptocurrency exchange in several commercials.
Billionaire Dan Loeb owned large stakes in companies in the Bankman-Fried empire through his hedge fund Third Point LLC.
David Lesperance, Managing Partner, Immigration and Tax Advisory, Lesperance & Associates, said:
“But corporate account holders like FTX and Celsius would be better off using this kind of reprieve to sort out their tax offices,” he said. “Previous illusions about ‘privacy’ and ‘secret’ of cryptocurrencies are blown away in bankruptcy as under bankruptcy law, those who lend cryptocurrencies are publicly named as ‘creditors’. This happens whether they want to or not.”
Lesperance said that if cryptocurrency holders weren’t properly complying with their jurisdiction’s tax laws by mistakenly thinking they were “secret,” the tax authorities would find it and, from an audit, charge them with tax evasion. He said he would take appropriate action.
“This is true even if they lose everything, which is the insult plus the injury,” he said.
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