The major cryptocurrencies on Wednesday experienced sharp price drops as reports of system errors at Binance, a renowned crypto exchange, got many investors into a bit of a panic. At the same time, digital currency traders also had to digest reports that major United States regulators are demanding for the registration of all cryptocurrency exchanges.
Binance is considered to be one of the biggest exchanges in the world – CoinMarketCap reports that it is one of the top 4 biggest exchanges for the most popular cryptocurrencies in terms of the traded volumes. Prior to the Wednesday crash, a number of users noticed something highly unusual with Viacoin – that is, a huge increase in buy orders for the cryptocurrency after which its market capitalization jumped from $64 million to $159 million in just a few moments. A probe into the matter revealed that there were lots of unauthorized sell orders going around.
“We are investigating reports of some users having issues with their funds. Our team is aware and investigating the issue as we speak,” the Binance team wrote on Reddit. “As of this moment, the only confirmed victims have registered API keys (to use with trading bots or otherwise). There is no evidence of the Binance platform being compromised.”
Binance later announced that it had halted withdrawals so as to look into what the company referred to as “unauthorized market sells.” The company further stated that there was no evidence that the platform had been compromised at the time.
The impact the alleged Binance hack has had on the market is quite significant. 360 Blockchain USA president, Jeff Koyen pointed out the concerns surrounding Binance resulted in the plunge of the prices of bitcoin and several other digital currencies as well.
“All of crypto is getting battered right now, based on fears that Binance was hacked,” Koyen stated.
SEC Crackdown Played a Role
A number of market analysts have also pointed the price drops to the United States Securities and Exchange Commission’s (SEC) recent decision to subpoena a number of firms that either deal in cryptocurrencies, or are associated with them. A large number of the subpoenas were specifically sent to companies that are selling digital token through Initial Coin Offerings (ICOs).