Bitcoin and other cryptocurrencies plunged in value Wednesday after the US Securities and Exchange Commission warned of “potentially unlawful” exchanges where you can buy and sell the virtual currencies.
If a trading platform lets people buy and sell cryptocurrencies that are considered securities — basically, something you can invest in — then they must register with the SEC as an exchange, the SEC said Wednesday. That registration means regulation that’s designed to protect consumers.
“The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not,” the SEC said. If you’re running one, get your lawyer on the phone, the SEC said, because SEC staff are focusing on your operations.
The news drove down prices of the granddaddy of cryptocurrencies, bitcoin, as well as several others, according to prices tracked by CoinMarketCap. Bitcoin, Bitcoin Cash and Ethereum dropped 9 percent over the last 24 hours, while Ripple and Litecoin dropped 8 percent.