NEW DELHI: Digital currency investors haven’t had a good time this January. Governments across the world have started to bring to bear their regulatory powers on the cryptocurrency market, even as elevated values have prompted large-scale thefts of bitcoin hoards. A multitude of scams seeking to siphon money out of exuberant new investors have also prodded platforms like Facebook to act.
Facebook on Tuesday banned all ads relating to cryptocurrencies on its platform. The comapnay said it was an attempt to prevent people from advertising what it calls “financial products and services frequently associated with misleading or deceptive promotional practices.”
Taken together, all three factors have caused Bitcoin -- the most popular cryptocurrency in trade currently -- to slide nearly 28 per cent in global markets over January in the steepest fall since January 2015. On Indian exchanges, bitcoin values have plunged 22.3 per cent in rupee terms during the month, from around Rs 8.47 lakh to Rs 6.58 lakh.
The most potent factor in the slide has been the increasing instances of regulatory oversight, even though cryptocurrencies are still feeling the effects of a record $500 million heist from Coincheck Inc, a Japanese exchange, on January 26.
The United States, since December, has been witnessing a sharp ramp-up in government actions focused toward the cryptocurrency market. On December 6, the US Commodity Futures Trading Commission reportedly sent subpoenas to two cryptocurrency trading venues.
In India, January saw the tax man come poking around. After a nationwide survey showed more than $3.5 billion worth of transactions conducted over a 17-month period, the income tax department sent income tax notices to tens of thousands of investors.
South Korea too has been a cause for worry for those rooting for lesser government intervention. The country on Tuesday stopped short of banning the cryptocurrency outright but put in place stringent restrictions on bitcoin trading.
It has barred anonymous investing and foreign investors from Korean markets. On the positive side, investors drew relief from South Korean finance minister Kim Dong-yeon’s statement that the country had no plans to ban or suppress cryptocurrency trade.