Chairman McHenry Sharply Criticizes U.S. Treasury and IRS Over Digital Asset Reporting Proposals

Chairman of the House Financial Services Committee, Patrick McHenry, has publicly voiced his concerns over the Notice of Proposed Rulemaking on digital asset reporting requirements issued by the U.S. Department of the Treasury and the Internal Revenue Service (IRS). The proposed regulations, which were announced on August 25, 2023, are part of the Infrastructure Investment and Jobs Act.

Chairman McHenry stated, “The notice of proposed rulemaking on digital asset reporting requirements is another front in the Biden Administration’s ongoing attack on the digital asset ecosystem.” He emphasized that following the passage of the Infrastructure Investment and Jobs Act, lawmakers from both parties had clearly expressed that any proposed rule should be “narrow, tailored, and clear.”

While McHenry acknowledged the delayed effective date and exemptions for other activities in the proposed rule, which he said mirrored his bipartisan bill, the “Keep Innovation in America Act,” he also pointed out its shortcomings. “However, it fails on numerous other counts. Any additional rulemakings related to the other sections from the law must adhere to Congressional intent,” he added.

The Chairman further urged the Biden Administration to cease its efforts to undermine the digital asset ecosystem in the U.S. and collaborate with Congress to establish clear regulations for the industry. He expressed his commitment to advancing his bipartisan solution, the “Keep Innovation in America Act,” to rectify these reporting requirements, safeguard the privacy of market participants, and ensure the digital asset ecosystem thrives in the U.S.

Chairman McHenry is the lead sponsor of H.R. 1414, the “Keep Innovation in America Act,” which aims to amend the digital asset reporting provisions in the Infrastructure Investment and Jobs Act. The bill has garnered support from a bipartisan group of colleagues, including Rep. Ritchie Torres (NY-15).

For context, the proposed regulations by the Treasury and IRS aim to mandate brokers to report sales and exchanges of digital assets conducted by their customers. The regulations are designed to address ambiguities surrounding digital assets, including defining brokers and introducing a new reporting form, Form 1099-DA. IRS Commissioner Danny Werfel commented on the regulations, emphasizing their design to “end confusion involving digital assets” and ensure that “digital assets are not used to hide taxable income.”

Public feedback on these proposed regulations is open until October 30, 2023, with a public hearing scheduled for November 7, 2023.

There are widespread criticisms regarding the proposed regulations, in addition to those expressed by Chairman McHenry. Chye-Ching Huang from the Tax Law Center at NYU Law voiced concerns with an article titled “U.S. Will Likely Lose Billions Due to Unacceptably Long Delay for Digital Asset Reporting Requirements“, over the “unacceptably long delay” in releasing the proposed rules. The Center pointed out the decision to postpone full implementation of these requirements until 2026, a two-year delay from the original statute. They warned of the financial implications of this delay, suggesting that the Treasury and IRS might lose out on billions due to tax non-compliance for digital asset transactions in 2023 and 2024.

The Tax Law Center further emphasized that the Treasury and IRS had other viable options to implement these reporting requirements in a timely manner, allowing for public input and system development.

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Over $5 Billion In BTC Paid In Top 10 Ransomware Variants, Says U.S. Treasury

Ransomware attacks in the U.S. have been on a rise since late 2020, but it is particularly booming in 2021. This year, hackers have hit numerous U.S. companies in large-scale hacks. One such attack on pipeline operator Colonial Pipeline led to temporary fuel supply shortages on the U.S. East Coast. Hackers also targeted an Iowa-based agricultural company, sparking fears of disruptions to grain harvesting in the Midwest. Schools, insurance companies, and police departments have also suffered from these attacks.

Related Reading | Questions Linger As FBI Recovers Colonial Pipeline Ransomware Crypto Funds

In response to this, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), charged with safeguarding the financial system from illicit use, released a Financial Trend Analysis. FinCEN published the report on Friday, October 15, 2021.

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The report analyzed the considerable growth in ransomware payments in the first six months of 2021 and the relative difference from last year.

Ransomware Attacks In The U.S.

U.S. Treasury Secretary Janet L. Yellen recently noted, “Ransomware and cyber-attacks are victimizing businesses large and small across America and are a direct threat to our economy.” According to the report, FinCEN analysis of Suspicious Activity Reports (SARs) filed during the first half of 2021 indicates that it is an increasing threat to the U.S.

Between January 1 and June 30, 2021, 635 SARs were filed, and 458 transactions were reported. This was 30% more than the total of 487 SARs filed for the entire 2020. The total value of suspected ransomware payments during the first half of 2021 was $590 million, more than the $416 million reported for the whole of 2020.

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Ransomware chart 2011 to 2021

Ransomware chart 2011 to 2021

Source: FinCEN Financial Trend Analysis

The U.S. Treasury Department said the average amount of reported ransomware transactions per month in 2021 was $102.3 million. FinCEN identified bitcoin (BTC) as the most common payment method in reported transactions. Approximately $5.2 billion in outgoing BTC payments tied to the top 10 variants over the past three years. It noted that USD figures cited in this analysis are based on the value of BTC when the transactions occurred.

BTCUSD Chart on

BTCUSD Chart on

BTC trading at over $60.7K | Source: BTCUSD on

If the trends keep up, hackers could make more from ransomware this year than they did in the previous ten years combined.

The U.S. Government’s Response

The U.S. government has been working to clamp down on attacks from hackers. The Biden administration has made the government’s cybersecurity response a top priority following a series of attacks this year that threatened the U.S. energy and food supplies.

Earlier this month, the Justice Department announced the launch of a National Cryptocurrency Enforcement Team to go after the exchanges that expedite crime-related transactions, like ransomware demands.

Related Reading | U.S. Recovers Millions Paid In Bitcoin For Pipeline Ransomware

In September, Wall Street Journal reported that the Biden administration was “preparing an array of actions, including sanctions, to make it harder for hackers to use digital currency.”

Also last month, the Department of the Treasury’s Office of Foreign Assets Control sanctioned crypto exchange SUEX OTC, S.R.O. (SUEX) for facilitating financial transactions for ransomware actors. This action was the department’s first such move against a virtual currency exchange over ransomware activity.

Coinciding with the release of the report, the Treasury Department released virtual currency guidance. The guidance said, “the virtual currency industry, including technology companies, exchangers, administrators, miners, wallet providers, and users, plays an increasingly critical role in preventing sanctioned persons from exploiting virtual currencies to evade sanctions and undermine U.S. foreign policy and national security interests.”

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U.S. Treasury Will Create Anti-Ransomware Sanctions

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The U.S. Treasury under the Biden administration plans to create anti-ransomware sanctions that target the use of cryptocurrency, according to reports from the Wall Street Journal.

Bad Actors and Exchanges Could Be Targeted

Though officials have not commented on the plan, experts suggest that the Treasury aims to create sanctions that target specific actors and wallets rather than the entire cryptocurrency infrastructure.

However, this could involve sanctions against exchanges that have handled ransomware payments. The WSJ suggests that this could “disrupt that firm’s ability to do business” and “spook other cryptocurrency platforms into avoiding such transactions.”

The rules have been under development since the Treasury issued a warning in October 2020 that advised businesses of possible sanctions and penalties for facilitating ransomware payments. A task force was then assembled in April of this year.

According to insiders, the sanctions could take effect as soon as next week, though no definite date has been given.

Ransomware Collected $400 Million in 2020

Ransomware continues to grow in scope. According to the blockchain analytics firm Chainalysis, ransomware victims paid more than $400 million in cryptocurrency over the course of 2020.

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That amount is more than four times the amount paid in 2019, when $93 million was collected by attackers.

Recent high-profile incidents include attacks against the U.S. Colonial pipeline and the meat producer JBS Foods. Additionally, various hospitals were targeted in October 2020.

Disclaimer: At the time of writing this author held less than $75 of Bitcoin, Ethereum, and altcoins.

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Treasury Prepping Stablecoin Clampdown: Report

Key Takeaways

  • Treasury officials have reportedly identified several risks posed by stablecoins.
  • Officials are concerned about the rapid growth of pegged assets and the potential for them to cause financial instability.
  • As stablecoins see increased use, regulators are quickly moving to regulate them.

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U.S. Treasury officials have reportedly identified several risks posed by stablecoins. The government body is set to make recommendations for stricter rules surrounding cryptocurrencies. 

Treasury Weighs in on Stablecoins

Treasury officials have identified several ways that stablecoins could pose a risk to investors and the wider economy, Bloomberg reported Thursday.

According to anonymous sources cited in the report, ensuring that investors can reliably move money in and out of tokens is a top priority, whether through centralized or decentralized exchanges. 

Additionally, the Treasury raised concerns about a market sell-off causing widespread financial instability and how certain stablecoins could scale up dangerously fast, outpacing national currencies. In particular, the sources expressed worry over the growth of tokens that are sponsored by tech giants like Facebook, which is currently developing its own stablecoin called Diem.   

While the comments on stablecoins are currently little more than recommendations from the Treasury, officials are said to be discussing plans for a more formal review by the Financial Stability Oversight Council. If carried out, the council would closely assess whether stablecoins could pose an economic threat. 

The regulatory attention being paid to stable, dollar-pegged assets is not unexpected. In July, U.S. Treasury Secretary Janet Yellen met with the Working Group on Financial Markets to discuss potential stablecoin regulations. The latest recommendations from Treasury officials indicate that regulatory decisions on stablecoins and the wider cryptocurrency market might be closer than anticipated. 

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Over the past several months, stablecoin providers have faced increasing pressure from regulators and the crypto community. The largest stablecoin by market capitalization, Tether, has long faced scrutiny over whether its USDT coins are adequately backed by cash. Additionally, Tether executives came under investigation by the Department of Justice in July over possible misconduct during the company’s early years.  

Other stablecoin providers have not escaped inspection either. USD Coin, which is widely used on Coinbase, has recently been criticized for the lack of transparency regarding how its coins are backed. While Coinbase initially stated that “each USDC is backed by one U.S. dollar, which is held in a bank account,” the company has since updated its website to include cash equivalents in the backing. 

Stablecoins form an integral part of the cryptocurrency ecosystem, providing a great deal of utility to those investing in digital assets or participating in decentralized finance. As such, U.S. regulators are quickly identifying the risks associated with stablecoins before they become more widely adopted.

Disclaimer: At the time of writing this feature, the author owned BTC, ETH, and several other cryptocurrencies including USDT.

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Treasury Pushes Global Crypto Reporting Rules in $3.5T Budget Bill

Key Takeaways

  • The U.S. Treasury is pushing for new crypto reporting, requiring U.S. exchanges to share data on non-U.S. customers.
  • The Biden administration wants to exchange this data for information on U.S. residents’ crypto accounts in other countries.
  • The new proposal comes only weeks after the Senate approved new tax reporting requirements for crypto brokers in the $1 trillion Infrastructure Bill.

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According to a report citing an anonymous administration official published Monday, the U.S. Treasury is pushing for new tax reporting requirements for crypto exchanges in the upcoming $3.5 trillion budget reconciliation bill.

Treasury Wants Data on Offshore Crypto Accounts

The U.S. Treasury reportedly wants U.S.-based crypto exchanges to report data on non-U.S. customers. 

The purpose of the provisions would be to gather information on foreign crypto account holders so that the U.S. could automatically share this data with other countries in exchange for information on U.S taxpayers trading cryptocurrencies in other countries. 

The Biden administration hopes to leverage the new tax reporting requirements to enforce tax compliance on U.S. crypto investors. The administration suspects that U.S. taxpayers are setting up offshore corporate entities in order to trade cryptocurrencies while avoiding paying taxes. To stop this, the U.S. needs information from other countries, which it can only get if it comes up with its own data to trade.

Furthermore, the treasury reportedly wants to expand the information reporting requirements to the “beneficial owners” of the legal entities set up by foreign account holders to trade cryptocurrencies. A beneficial owner is a legal term for natural persons that enjoy certain ownership benefits even though the legal title of the property belongs to another person. In the U.S., this includes individuals who own at least a 25% equity stake in the legal entity or those with “significant responsibility to control, manage, or direct” the said entity.

According to Treasury’s Green Book, third-party information reporting is critical in combating tax avoidance:

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“In order to ensure that the United States is able to benefit from a global automatic exchange of information framework with respect to offshore crypto assets and receive information about U.S. beneficial owners it is essential that United States reciprocally provide information on foreign beneficial owners of certain entities transacting in crypto assets with U.S. brokers.”

Commenting on the latest news, Jerry Brito, CEO of crypto think tank Coin Center, tweeted, “We don’t object to crypto tax reporting requirements (indeed we’ve asked for reporting guidance for years), we object to last-minute additions to ‘must-pass’ bills outside regular order and with little or no public input.”

Earlier this month, Coin Center and the Blockchain Association, among others, lobbied the Senate against the last-minute provisions Secretary Yellen reportedly pushed to include in the $1 trillion Infrastructure Bill. The industry-led effort failed to amend the bill, which includes provisions that make crypto brokers—a too broadly defined term according to industry experts—responsible for sharing tax information with the IRS.

Disclosure: At the time of writing, the author of this feature owned ETH and several other cryptocurrencies.

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Crypto Company Circle Seeks To Become Global Digital Currency Bank

The company behind the increasingly popular USDC stablecoin dreams big. Circle wants to leverage its know-how and good reputation to become “a global digital currency bank.” That means it’s also looking into becoming a digital currency bank in the US. Their plan’s announcement focused on that region of the planet, but the wording makes it clear that they’re ultimately looking for worldwide domination. 

Related Reading | Is USDC’s Billion Dollar Growth A Sign Crypto Smart Money Is Ditching Tether?

According to Coindesk, “this would be an industry first, with a scope far beyond the OCC banking charter already conditionally issued to Anchorage, Paxos and other crypto-native financial services firms.” The company’s aim is to provide “frictionless, instant and nearly free payments that combined fiat reserve currencies with open, permissionless blockchains, and eventually building on these open networks to support new forms of capital formation and intermediation.” 

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It’s the project ready for prime time or in its infancy? Did they file the documents already? Will they be able to pull this off? Keep reading for extra clues and info.

USDCUSD price chart for 08/10/2021 - TradingView

USDCUSD price chart for 08/10/2021 - TradingView

USDC price chart for 08/10/2021 on Bitbay | Source: USDC/USD on

Circle Played Nice With Governments From The Get-Go 

The USDC stablecoin is issued by CENTRE, a joint venture between Circle and Coinbase. Their aim is “to conform with stringent U.S. money transmission supervisory and regulatory standards.” In contrast Tether, their main competition, is famous for the probe that the US Department Of Justice launched against them.

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The main point of contention against Tether is the reserves they hold to back up their USDT. Attacking their competition’s weak spot, Circle claims, “Establishing national regulatory standards for dollar digital currencies is crucial to enabling the potential of digital currencies in the real economy, including standards for reserve management and composition.” 

Since regulatory compliance is their forte, Circle spends half of their announcement praising their own transparency and USDC’s liquidity even “in times of intense demand to redeem USDC”. To prove that, they provide an independent accountant report that highlights the “composition of USDC reserves, including the credit quality of the underlying assets.

Related Reading | Tether (USDT) To Face Do or Die Situation in 2021: Messari Report

Why does all of that have to do with their plans to become a national digital currency bank? It proves that they’re in tune with the US Government. 

Now, with USDC at more than $27.5 billion in circulation, and building on our long-standing commitment to trust, transparency and accountability in the dollar-denominated reserves backing USDC, we are setting out to become a U.S. Federally-chartered national commercial bank.
Circle intends to become a full-reserve national commercial bank, operating under the supervision and risk management requirements of the Federal Reserve, U.S. Treasury, OCC, and the FDIC.

Other Big Plans For The Crypto Company

Recently, Circle announced its intention to go public before the end of the year. According to Coindesk, the company “partnered with a special purpose acquisition company (SPAC) to go public later this year. The deal valued Circle at $4.5 billion.” Also, their USDC project will soon go live in multiple blockchains. As NewsBTC informed:

It will soon be available in, “Avalanche, Celo, Flow, Hedera, Kava, Nervos, Polkadot, Stacks, Tezos, and Tron.” That will bring the total to 14; since USDC is already functional in Ethereum, Algorand, Stellar, and Solana.

In related news, NewsBTC recently highlighted a Messari report that shows USDC is the most used stablecoin in DeFi.

From what Ryan Watkins, a credible researcher, predicted, the stablecoin share for Tether on Ethereum could dip below 50%. In addition, Watkins revealed that more than half of USDC’s total supply is now in smart contracts.

The equivalent value for this USD Coin supply is about $12.5 billion. According to Messari, CoinMetrics data estimates show that USDC’s stablecoin supply is over 40% on Ethereum.

However, none of that guarantees that their plans to become a global digital currency bank will come true. Keep the NewsBTC tab open for further information on this developing story.

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U.S. Treasury’s Janet Yellen Will Discuss Stablecoins

Key Takeaways

  • Janet Yellen will meet with the Working Group on Financial Markets to discuss stablecoin regulations in the U.S. next week.
  • Yellen has historically been critical of cryptocurrency; however, she has also acknowledged its potential to improve finance.
  • It appears that the upcoming discussion will concern commercial stablecoins, not government-backed CBDCs.

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U.S. Treasury Secretary Janet Yellen will meet with regulators to discuss stablecoins, according to an announcement today.

Workgroup Will Take Place Monday

According to the U.S. Treasury, Yellen will meet with the President’s Working Group on Financial Markets on Monday, July 19.

That group includes members of the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.

“Bringing together regulators will enable us to assess the potential benefits of stablecoins while mitigating risks,” Yellen stated. She added that government agencies should work together on regulation and create reccomendations for authorities.

The discussion will build on a 2020 statement from the workgroup that discussed similar regulatory matters around stablecoins.

The workgroup does not seem to be concerned with a central bank digital currency (CBDC) or government-issued stablecoins. Rather, it seems to concern regulations around commercial stablecoins.

Is Yellen For or Against Crypto?

Yellen became Secretary of the U.S. Treasury as President Joe Biden took office earlier this year. She was confirmed on Jan. 25, 2021.

Yellen has historically held an anti-cryptocurrency stance, highlighting its use in criminal activity. However, she has also acknowledged that digital currency has the potential to improve the financial system.

Today’s news means that Yellen is slightly more open to digital currency than her past statements may suggest.

However, this news does not necessarily indicate that regulations will change significantly. Currently, entities that simply wish to work with stablecoins are seemingly free to do so. For the most part, cryptocurrency exchanges can legally circulate stablecoins, and the OCC has even granted banks the right to work with stablecoins. Visa has also expressed its intent to offer stablecoin transactions.

One possible regulatory restriction concerns recent guidance from FinCEN that may require stablecoin creators and issuers to operate as Money Service Businesses (MSBs). However, this has not hindered any major stablecoin issuers to date.

Disclaimer: At the time of writing this author held less than $75 of Bitcoin, Ethereum, and altcoins.

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OFAC Requests Chainalysis Subscription For Bitcoin Blockchain Surveillance

The U.S. Office of Foreign Assets Control wants a renewed subscription to Chainalysis blockchain surveillance tools for monitoring Bitcoin.

The Office of Foreign Assets Control (OFAC), a financial intelligence and enforcement agency within the U.S. Treasury Department, has requested a second subscription to license, training and support packages from blockchain analysis firm Chainalysis, according to a public contract notice.

“OFAC requires a commercial online blockchain tracing web-based application tool to equip investigators in its Office of Global Targeting (OGT) to analyze and track virtual currency transactions e.g. Bitcoin, in order to gather attribution information on involved parties that OGT may put on the [Specially Designated Nationals] List,” the notice reads. “This tool would specifically support cyber sanctions implementation undertaken by OFAC.”

OFAC made a similar request on May 4, 2021. The Specially Designated Nationals (SDN) List includes parties that are sanctioned from conducting financial transactions by the U.S. due to money laundering or terrorist financing concerns.

While Bitcoin can facilitate pseudonymous financial transactions, every transaction is recorded on a public and immutable digital ledger. This allows blockchain analysis firms such as Chainalysis to determine details about Bitcoin transactions, sometimes including the real-world identities behind them.

There are some privacy layers that Bitcoin users employ to better obscure these transactions, such as coin mixing and CoinJoin. But it appears this latest subscription request is specifically targeting coin mixing services like Wasabi Wallet.

“This license also includes Wasabi Demixing services at no additional cost to OFAC, and with no limits to the number of requests,” per the notice. “Chainalysis meets OFAC’s requirements by effectively providing the following capabilities: Address clustering; Transaction flow mapping and graphing; Wallet explorer; Analysis of user behavior, exchange rate, trade, and market data.”


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Treasury Calls for $10K Bitcoin Transfers to be Disclosed to IRS

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The U.S. Treasury is taking a tough stance on cryptocurrencies, citing tax evasion risks. 

U.S. Treasury’s Crypto Clampdown

The U.S. Treasury Department is taking aim at cryptocurrencies. 

In a report on tax-enforcement proposals posted Thursday, the government body said that it will require cryptocurrency transactions worth $10,000 or more to be reported to the Inland Revenue Service. The Treasury’s update noted that there are tax evasion risks associated with digital assets. The statement read: 

“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion.” 

Bitcoin has struggled to shake off its negative stigma with official bodies since its inception. Janet Yellen, known for her crypto skepticism, and others have frequently discussed Bitcoin’s role as a vehicle for criminal activity. 

The Treasury’s statement added that “as with cash transactions, businesses that receive crypto assets with a fair market value of more than $10,000 would also be reported on.” 

It also noted that the ruling would take effect from 2023 in order to give crypto holders time to prepare.

Bitcoin tumbled 5% on the news, dipping below $40,000 for the second consecutive day. The asset suffered a plunge yesterday in the biggest crypto bloodbath since March 2020. Ethereum, Binance Coin, and Dogecoin are also trading down on the news. 

Editor’s note: This story is breaking and will be updated as further details emerge.

Disclosure: At the time of writing, the author of this feature owned ETH, ETH2X-FLI, and several other cryptocurrencies. 

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Three Reasons Why Bitcoin Dropped Below $51,000 Last Night

Key Takeaways

  • Bitcoin crashed to lows below $51,000 late Saturday due to forced liquidations of long orders.
  • A string of bad news triggered the sell-off, however, only one of them was verifiably true.
  • While many indicators point to a “buy the dip” action, the volatility may persist this week.

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Bitcoin and the broader crypto market saw one of the most gruesome crashes, leading to $9 billion in liquidations. There were three key sources of the negative catalysts. 

Money Laundering Report Clips Bitcoin

The price of Bitcoin plunged to lows of $50,900 on Binance while Coinbase recorded $51,300 at 11:35 pm ET time on Saturday. 

A drop of 12.3% occurred within 20 minutes, starting at 11:15 pm. Apparently, it was triggered by a tweet sent almost an hour ago that claimed the U.S. Treasury was investigating financial institutions for illicit use of crypto. 

Prominent crypto lawyer Jake Chervinsky raised skepticism on the credibility of the news. He stated that the “treasury doesn’t charge money laundering (DOJ does).” Moreover, there are no other reports of the claims. 

While the unverified source was the last tipping point, bearish pressure had been building in the market all day. 

Bitcoin mining hashrate dropped by 40% a week after an accident in a Chinese coal mine halted operations in the entire Xinjiang region. The drastic change raised concerns around Chinese dominance over the market, with one region affecting nearly half of the total hashrate.

Last but not least, rumors of a sell-off of COIN shares by Coinbase executives yesterday had also weakened the market’s spirits, which was ironically heightened last week for the same reason. 

Pseudonymous Twitter account Crypto Randy posted yesterday that the chief product officer and financial officer at the exchange sold nearly all of their shares at launch Wednesday. 

COIN plummeted to lows of $309 from a $430 peak the day after its debut. 

However, financial experts have contested those claims and guessed that a mix-up of forms and failure to differentiate between actual shares and options contracts led to the misunderstanding. Eric Yakes, CFA, who brought the issue on Twitter has deleted the tweet. Moreover, experts like Meltem Demirors, CFO at CoinShares, stated that Coinbase executives only hedged their holdings, which is still probably above 90%. 

Together, the buildup of negative pressure blew out last night after the suspicious U.S. Treasury report.

The Sell-Off 

The liquidation price of over-leveraged long Bitcoin and altcoins orders, primarily on Binance, was completely wiped out. As traders forced to sell at those prices amplified the sell-off, causing a domino effect on the price. 

Over $9 billion, mostly in long orders, were liquidated, with Binance users accounting for nearly 50% of the total amount. Huobi, ByBt, and Okex each recorded over $1 billion in liquidations. 

Crypto market liquidation data after the crash on Apr. 17, 2021. Source. Bybt

Those traders were mostly long Bitcoin ($4.94 billion) and Ether ($1.07 billion). 

The funding rate for perpetual contracts had dropped to lows not seen since the March 2020 crash. The largest-ever liquidation seen since the crash suggests that the worst might be behind.

The “buy the dip” action was also visible in the Coinbase Premium indicator, where the larger difference between spot prices on Coinbase Pro and derivatives market indicates strong buying action by institutions.

However, the confirmation of the local bottom warrants consolidation above today’s lows in the coming days. 

The funding rate of Bitcoin perpetual contracts on Binance has retaken a bullish stance—around 50% annual percentage rate—which is a worrying signal in the short-term.

Lastly, if the rumors around the regulatory crackdown are true, it could market a generational top on Bitcoin. 

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Bitcoin (BTC) $ 39,531.59 1.80%
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