Bitcoin (BTC) has dropped to $22,000; US senators said: “Binance was at the center of illegal activities”; HSBC and Nationwide have restricted individual customers’ access to cryptocurrencies.
Bitcoin’s price drop is attributed to Silvergate Capital. The BTC price tumbled more than 5 percent from $23,500 to $22,240 in just over 60 minutes at around 4:00 am last night amid a wave of uncertainty regarding crypto-friendly bank Silvergate Capital.
Bitcoin’s total market cap is currently $431 billion. The sharp drop last night wiped out $22 billion in Bitcoin. However, the sharp fall did not occur only in Bitcoin. Ethereum (ETH), Ripple (XRP), Cardano (ADA), Polygon (MATIC), and altcoins also experienced a similar sharp decline.
Markus Thielen, head of research at digital asset platform Matrixport, said in a statement that he believes the price drop in Bitcoin is linked to Silvergate Bank’s delayed annual 10-K financial report, as well as increased efforts by US regulators to restrict ties between banks and crypto firms.
“The reason for the drop is the continued downturn from Silvergate Bank as there is now more uncertainty about fiat opening and closing. In addition, there are broader industry concerns that US regulators are trying to cut further banking relationships between crypto companies and FDIC-insured banks.”
In addition, Thielen also underlined that this situation benefits Hong Kong and China, which are starting to become more crypto-friendly.
US senators said: “Binance was at the center of illegal activities”
According to Bloomberg’s report, a memo signed by Senators Elizabeth Warren, Chris Van Hollen, and Roger Marshall requested detailed information regarding the financial processes of both Binance and Binance US.
“Small information on Binance’s finances indicates that the exchange is a hotbed of illegal activity, which facilitates the payment of more than $10 billion to criminals and those who evade sanctions.”
This memo, signed by the senators, was sent to both Binance US president Brian Shroder and Changpeng Zhao.According to data from CryptoCompare, Binance continues to be the world’s largest cryptocurrency exchange, holding a 60% market share as of February.
The company has faced investigations from several US agencies in recent years, including the SEC, the Department of Justice, and the Internal Revenue Service.
Binance partners also got their share from these investigations initiated by US regulators. Paxos, which issues the Binance-branded stablecoin BUSD, has faced sanctions from both the New York Department of Financial Services and the SEC. The company had to stop printing BUSD with the incoming order.
Zhao’s claim that Binance US is fully independent is eerily similar to Sam Bankman-Fried’s claim that FTX US and FTX are independent. The senators also said the following about the exchange’s compliance activities:
“Binance’s current business strategy appears to depend on the ability to maintain a ridiculously weak anti-money laundering compliance program”
Crypto restriction from HSBC and Nationwide
HSBC and Nationwide have restricted individual customers’ access to cryptocurrencies. According to Bloomberg’s report, both UK-based banks signed similar decisions one after another after warnings from regulators.
Nationwide, in a statement yesterday, announced that while it limits customers’ purchases of cryptocurrencies with debit cards to 5,000 pounds per day, it is no longer possible to purchase cryptocurrencies with credit cards. HSBC also announced that the purchase of cryptocurrencies with a credit card is prohibited.
HSBC and Nationwide cited the warnings issued by the Financial Conduct Authority (FCA) as the reason for their decision.
Credit companies such as Banco Santander SA, Lloyds Banking Group Plc, and Natwest Group Plc are among the companies that have similarly placed crypto limits. Most of the major banks in the country have also implemented various restrictions specific to the Binance exchange.
