Cryptocurrency prices have lately risen as officials prepare to crack down on the industry.
According to monitoring firm CoinGecko, Bitcoin was up slightly to $20,840.92 on January 19. Ether, the Ethereum blockchain’s native currency, rose over 1% to $1,535.80, while Dogecoin remained unchanged at $0.081013.
According to Billy Endres, a cryptocurrency analyst at Finder, the crypto industry has shown the most growth in recent months, increasing its total market value to nearly $1 trillion. Bitcoin and Ethereum are leading the bullish movement, with both major cryptocurrencies up +20% since the new year.
According to Endres, there has been a moderate pullback since then, and Bitcoin now trades at about $20,700 and Ethereum at about $1,500.
“However, this pullback is to be expected,” he said. “As is often the case during periods of bullish momentum, traders opt to take profits on larger market cap cryptos and diversify into altcoins.”
All cryptocurrencies other than Bitcoin and Ether are referred to as altcoins.
Endres believes that if Bitcoin and Ether support continue strong at crucial levels, capital would likely flow into altcoins, perhaps leading to large gains.
He stated that while the situation appears to be encouraging, however, the feeling is mixed. Some traders believe this is just a bull trap and the decline will continue shortly.
On the regulatory front, Winston Ma, an adjunct professor at New York University Law School, stated that the United States legal onslaught on cryptocurrency is escalating, particularly from the Securities and Exchange Committee.
The SEC accused Genesis Global Capital, and Gemini Trust on Jan. 12 of the unregistered offer and sale of securities via the Gemini Earn crypto asset lending program, which Ma said racked up enormous losses for clients.
They breached securities laws, according to SEC Chair Gary Gensler, by failing to comply with disclosure rules required to safeguard investors.
According to Ma, with such high-profile precedents, federal securities laws are likely to be used more extensively and actively in the cryptocurrency industry than earlier.
And this might be a watershed moment as regulators crack down on some of the biggest names in crypto-asset markets.
He also stated that SEC enforcement actions will set the tone for cryptocurrency rules in 2023 since crypto-related legislation is still in process.
The FTX drama has kept authorities on their toes as they prepare their case against Sam Bankman-Fried, the disgraced founder of the FTX cryptocurrency exchange, facing a series of criminal and civil allegations.
According to a court filing, Tom Brady and his ex-wife Gisele Bundchen were both FTX ambassadors and stockholders.
Several ADs featuring the former celebrity couple promoted the cryptocurrency exchange.
Billionaire Dan Loeb controlled many shares in the Bankman-Fried enterprise through his hedge firm Third Point LLC.
While the public enjoyed the outings of different celebrities and high-profile FTX investors, the bankruptcy courts gave a three-month reprieve to FTX account holders, according to David Lesperance, managing partner of immigration and tax counsel of Lesperance & Associates.
“However, those account holders in companies like FTX or Celsius better use this type of reprieve to get their tax house in order,” he said.
David also added that any previous illusions about “privacy” or “secrecy” in cryptocurrency are shattered in bankruptcy. Because, under bankruptcy laws, those who borrowed their cryptocurrency will be publicly named “creditors”. This thing will happen whether they want it or not.
Lesperance said that if the cryptocurrency owner did not properly comply with the tax laws of their jurisdiction because they mistakenly thought it was “secret,” the tax authorities would discover this and take appropriate action, ranging from an audit to a tax evasion charge.
He also said that even if they lost everything – that is just injury on top of insult.