Bitcoin scrapped on Wednesday following news that the U.S. Securities and Exchange Commission is study the cryptocurrency market.
The Wall Street Journal reported Wednesday rounded off ET that, as part of that investigation, the SEC has issued “scores of subpoenas” to seize information from technology companies and advisers tied to the digital currency sells.
The commission is looking into the structuring of initial coin offerings, which aren’t insisted to adhere to the strict regulations that apply to public offerings, the Register said, citing sources.
Initial coin offerings allow cryptocurrency start-ups to terminate funds through the issue of digital tokens.
Bitcoin initially restless lower by around 2 percent following the report, but pared some of those sacrifices during afternoon Asian trade.
The digital currency last traded at $10,325.08, harmonizing to CoinDesk’s bitcoin price index, which tracks prices from digital currency stock markets Bitstamp, Coinbase, itBit and Bitfinex.
Meanwhile, price changes in ethereum, the next largest cryptocurrency by market capitalization, saw a similar story. The virtual currency passed by less than 2 percent before clawing back some failures to trade at $859.06, data from CoinDesk showed.
In January, SEC Chairman Jay Clayton and other trues said in a statement that even though the agency pursues contraventions in the space, there remains a “substantial risk” that it would be unqualified to recover investments for those who lost money.
Last December, Clayton send a lettered in another statement that Main Street investors ought to need clear answers if they decided to invest in ICOs or cyptocurrency-linked artifacts.
“A number of concerns have been raised regarding the cryptocurrency and ICO superstores, including that, as they are currently operating, there is substantially itty-bitty investor protection than in our traditional securities markets, with correspondingly immense opportunities for fraud and manipulation,” Clayton warned.
— CNBC’s Christine Wang donated to this report.