Bitcoin, Ether fall as SEC’s Gensler says crypto firms are running out of time to comply with securities laws

Bitcoin fell below US$17,000 in Thursday morning trading in Asia. The other top 10 non-stablecoin cryptocurrencies by market capitalization also retreated after US Securities and Exchange Commission Chairman Gary Gensler said the crypto industry is running out of time to comply with securities laws. He spoke on Wednesday in an interview with Yahoo Finance.

See related article: SEC’s Gensler says proof-of-stake cryptocurrencies can be securities

Fast facts

• Bitcoin fell 1.4% to US$16,847 in the 24 hours to 8am in Hong Kong, while Ether fell 3.1% to trade at US$1,232, according to CoinMarketCap.

• Leading memecoin Dogecoin saw the biggest losses on CoinMarketCap’s list, falling 4.4% to $0.095. Polkadot lost 3.7% to $5.30. Litecoin also fell 3.7% to trade at US$76.96.

• Gensler said his agency had sufficient authority to begin holding digital asset firms accountable for securities regulation.

• Gensler said crypto exchanges and lending platforms must comply with these regulations. “They can do it the right way by cooperating with the SEC, or we can continue on a course of more enforcement actions, and I have to say, the runway will be shorter,” he said.

• Gensler said many crypto firms have been running mixed platforms that offer lending, trading, hedge funds, etc., and such practices must end.

• He did not specifically address the collapse of Bahamas-based crypto exchange FTX.com. It has been alleged that FTX used customer funds from the exchange to trade crypto and make investments through affiliated brokerage Alameda Research.

• Gensler said in September that any proof-of-stake cryptocurrency, such as the $150 billion Ethereum network, should be considered a security.

• US stocks ended largely lower on Wednesday. The Nasdaq Composite Index lost 0.5% and the S&P 500 ended 0.2% lower for its fifth consecutive day of losses. The Dow Jones Industrial Average was little changed.

• Investors see a recent run of bullish economic indicators at odds with comments by US Federal Reserve Chairman Jerome Powell last week, when he said the central bank may begin to ease the pace of rate hikes to curb inflation.

• U.S. services activity came in at 56.5% in November, according to the Institute for Supply Management’s monthly survey released Monday. A reading of 50% or more shows the economy is growing, while 55% is considered very strong. The US jobs report released on Friday showed the economy added 263,000 jobs in November, or more than expected by 200,000.

• The Fed has been raising interest rates since March to try to curb inflation, raising from near zero to a 15-year high of 3.75% to 4%, and has signaled that rates could end up exceeding 5%. The Fed has said it wants inflation at a target of 2 percent. The consumer price index showed that inflation was 7.7% in October, down from 8.2% in September.

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