On January 18, the cryptocurrency market saw its first major retraction since the turn of the year. On this date, major assets like bitcoin and Ethereum lost about 3% of their value. Meanwhile, other tokens like Solana and SHIB lost 8% and 12% respectively.
The day was filled with news that had a negative impact on the market. Earlier today, news about a potential bankruptcy from one of the biggest crypto lending companies, Genesis.
The bankruptcy of a lending platform like Genesis can also lead to a lack of trust in the broader cryptocurrency market. This can ultimately cause a decline in the value of cryptocurrencies and a decrease in overall adoption.
United States DOJ Wants Regulation Now
On top of that, the United States Department of Justice just announced a new multi-nation cooperative, named dubbed as a “major international cryptocurrency enforcement action,” in order to further regulate and investigate potential crimes linked to cryptocurrencies.
The announcement comes at the same date that the US Government charged crypto exchange Bitzlato with money laundering. Authorities have prosecuted the platform’s creator for laundering monies associated with illegal Russian funding.
How The FTX Debacle Resulted In Stronger Regulation Plans
The announcement of the international initiative arrives only a couple of weeks after FTX’s former CEO Sam Bankman-Fried was charged with several fraud accusations.
Furthermore, the size of the market crash that resulted in billions of dollars lost for customers and FTX investors further pushed the pace of approving regulation on exchanges and other crypto-related businesses.
“The bottom line is that we need comprehensive regulation in place to weed out the bad actors,” US Senator told Recode at the time. “[we need to] ensure consumers have faith in the institutions they are trusting with their hard-earned money.”
Regulating cryptocurrency exchanges is inevitable at this point. With the idea that new regulations will protect consumers and ensure fair market practices, Governments hope that more regulations can help prevent fraud, mony laundering and hacking in the future.