© Provided by TheStreetThe cryptocurrency market is posting its biggest rise in recent months as regulators step up enforcement efforts.
Cryptocurrency prices have surged recently as regulators seek to crack down on the industry.
Bitcoin ( ~BTCUSD ) rose slightly to $20,840.92 on January 19, according to data from CoinGecko. Ethereum, the main currency of the Ethereum blockchain, rose almost 1% to $1535.80 while Dogecoin remained at $0.081013.
“The cryptocurrency market posted its biggest growth in recent months, reaching a total market capitalization of nearly $1 trillion,” said Finder cryptocurrency expert Billy Andres. “Bitcoin and Ethereum led the way up, with the two major cryptocurrencies up 20% since the new year.”
Endres said there has been a slight recovery since then, with bitcoin trading around $20,700 and ethereum above $1,500.
“However, this withdrawal is expected,” he said. “As is often the case during bull periods, traders like to use large-cap cryptocurrencies and diversify into altcoins.”
Secret feelings are mixed
Altcoins are all cryptocurrencies except bitcoin and ether.
Andres said that if support for Bitcoin and Ethereum remains strong at key levels, capital is likely to flow into altcoins, which could lead to significant gains.
“While everything seems positive, the mood is mixed,” he said. "Some traders say it's just a bull trap and the downtrend will resume soon."
On the regulatory front, Winston Ma, an assistant professor at NYU School of Law, said that US legal pressure on crypto, especially through the Securities and Exchange Commission, is mounting.
On Jan. 12, the SEC ordered Genesis Global Capital and Gemini Trust to conduct an unregistered listing and sale of securities under the Gemini Earn crypto asset lending program, which May said "has caused massive losses to clients."
According to SEC Chairman Gary Gensler, they violated securities laws by failing to comply with "disclosure requirements to protect investors."
“With such high-profile precedents, federal securities laws are likely to be enforced more widely and aggressively than ever before in the world of cryptocurrencies,” stated Ma, Blockchain and Web3. Author of the Metaverse Cryptocurrency, Privacy and Security Foundation Building project. "
“This could be an important moment as regulators shut down some of the biggest names in the crypto asset market,” he added. “The SEC’s enforcement action will pave the way for cryptocurrency regulation in 2023 as cryptocurrency-related legislation isn’t immediately visible.”
Big names involved in the FTX scam
The FTX scandal has forced regulators to prepare their case against Sam Bankman-Fried, the disgraced founder of the FTX cryptocurrency exchange, who faces numerous criminal and civil charges.
According to court documents, Tom Brady and his ex-wife Gisele Bündchen were FTX ambassadors and shareholders. The former celebrity couple has promoted the cryptocurrency exchange in several advertisements.
Billionaire Dan Loeb also owns significant stakes in Bankman Freed's empire through his hedge fund Third Point LLC.
David Lesperance, immigration and tax consultant for Lesperance & Associates, said: "While the public enjoys visits from various FTX celebrities and high-profile investors, the Bankruptcy Court has granted a three-month temporary suspension for actors holding FTX accounts."
“However, account holders of companies like FTX or Celsius are better off using such a grace period to keep their wheels in place,” he said. “All previous illusions about the “secrecy” or “privacy” of cryptocurrencies will crumble as those who have lent themselves to cryptocurrencies are publicly referred to as “creditors” under bankruptcy law. Whether they like it or not, it will happen.”
Lesperance said that if the owner of a cryptocurrency does not properly comply with the tax laws of its jurisdiction, mistakenly considering it "secret", the tax authorities will find out and take appropriate measures, ranging from investigations to accusations of tax evasion.
“It’s true, even if they lost everything, it’s injury after injury,” he said.