Crypto Market Selloff Intensifies Amid CFTC Probe; Bitcoin Plunges Below $6,700

Cryptocurrency prices experienced a massive selloff on Sunday, as investors grappled with multiple pain points ranging from cyber security to regulation. At the time of writing, the overall market was trading at its lowest level since mid-April.

Market Meltdown

The cryptocurrency market has shed $47 billion over the past 24 hours, according to data provider CoinMarketCap. The market’s total value was last seen hovering just below $294 billion.

The intense selloff was associated with a sharp rise in trading volume, with daily turnover reaching $19.5 billion. The market averaged between $14 billion and $16 billion last week.

Nearly all of the top-100 cryptocurrencies by market capitalization had booked losses. All major assets in the top-ten were down double digits percentage-wise, with EOS plunging more than 22% to $11.00 a unit.

IOTA and TRX were each down more than 18%. Stellar Lumens and Cardano’s ADA were down 13% and 14%, respectively.

Bitcoin pierced below $6,700, possibly setting the stage for a bigger correction in the near term. At the time of writing, bitcoin was down nearly 12% at $6,740.

Despite increased volume, turnover in the crypto markets remains very low by recent standards. So low as weak volumes persist, volatile price swings can be expected.

CFTC Probe

Hacked reported Sunday that the U.S. Commodity Futures Trading Commission (CFTC) is broadening its investigation into price manipulation tied to bitcoin futures contracts.

According to The Wall Street Journal, CFTC regulators grew frustrated with CME’s inability to extract comprehensive trading data from four major cryptocurrency exchanges. The exchanges – Bitstamp, Coinbase, itBit and Kraken – eventually handed over data, but only on a few hours’ worth of activity. The Chicago-based exchange had initially requested a full day.

CME Group is regulated by the CFTC, which is growing increasingly weary of price manipulation in the digital currency market. The commodity regulator backed the launch of bitcoin futures in December but conceded that the project was risky.

Coinrail Hack

The crypto world experienced yet another high-profile security breach Sunday after South Korea’s Coinrail announced that it had lost more than $40 million in altcoins. The heist targeted lesser known tokens NPXS, ATX and NPER. The trio of affected coins were frozen following the attack.

The team at NPER later announced it had located the wallet of the perpetrator. According to the group’s Medium post, the wallet’s address has been permanently locked, making it impossible to transfer the coins.

Coinrail is one of several digital currency exchanges to have been targeted by cyber criminals. The frequency of attacks has intensified over the past 12 months as criminals seek to exploit the rapid rise in cryptocurrency prices. Some have attributed the rise of cyber attacks to the cryptocurrency market’s largely unregulated status. A lack of regulation often means there’s little recourse for victims of large-scale breaches.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi