European regulator, Monero ransom pressures bitcoin and crypto market lower

Bitcoin has dropped $200 dollars as it fails the $4,000 test yet again.

Failure to hang on to the gain seen last weekend seemed likely after the price fell back from highs around 4180 last Sunday and stalled over the past few days.

BTC is currently priced at $3,843.

Commenting on the latest several, Mati Greenspan, Senior Market Analyst at eToro, the global, multi-asset, investment platform, said:

“After Bitcoin’s leap to $4,000 earlier this week, it seems that we’re now seeing a reversal of this surge which in turn, is also causing XRP and Ethereum’s price to fall.

“While Bitcoin was unable to hold on to Sunday’s momentum, it’s important to remember that this price decline still remains within the broader $3,000 – $5,000 range, meaning the significance of this should not be overstated.”

Monero and the ESMA

Beyond the technicals, other factors triggering the timing of the fall may be related to the latest happening with Monero at the centre of a kidnapping of 68-year-old Anne-Elisabeth Falkevik Hagen in Norway and the rebuff of reports circulating a couple of days ago that the Japanese financial regulator was considering a bitcoin ETF.

Also, and perhaps more significantly, was the report from  the European Securities and Markets Authority (ESMA) indicating that it was continuing with is dim view of crypto and signalling that regulation was likely moving closer.

The ESMA has divided the into those that are securities and should be complaint with its MiFiD regulations and those that aren’t and should be regulated in some other way:

Steven Maijoor, the chair of ESMA, said: “Our survey of NCAs [National Competent Authorities] highlighted that some crypto-assets may qualify as MiFID financial instruments, in which case the full set of EU financial rules would apply. However, because the existing rules were not designed with these instruments in mind, NCAs face challenges in interpreting the existing requirements and certain requirements are not adapted to the specific characteristics of crypto-assets.

“Meanwhile, a number of crypto-assets fall outside the current financial regulatory framework. This poses substantial risks to investors who have limited or no protection when investing in those crypto-assets.”

The securities regulator said it thought regulating the space, perversely, held the danger of legitimising the space but this could be somewhat mitigated by warning consumers against investing in the sector.

The relative hostility of the European securities regulator contrasts with the crypto-friendly approach of a number of national jurisdictions, such as Luxembourg, Lichtenstein, Switzerland, Malta and Gibraltar. The attempt to build crypto hubs in those places could be threatened by over-arching regulations at the European Union level.

The Norway kidnapping and the attendant demand for payment to secure release in Monero worth €9 million has brought the precarious position of privacy coins into view vis a vis the glare of regulators.

The likelihood that coins such as Monero (XMR) and Cash (ZEC) will be outlawed has surely risen. That’s not to say that any ban would be effective but it cold certainly make wide scale adoption difficult and perhaps crash the price of such crypto assets.

Monero is also heavily implicated in cryptojacking, where malware is used to mine on the computers of the unsuspecting. Apparently 5% of the Monero in circulation has been mined this way.

Monero is down 15% today to $46.

Most alt coin have followed bitcoin lower, with the notable exception of Tron which is maintaining its strong momentum. It is 6% higher so far today at $0.0291.

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