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Bitcoin Crashes to Lowest Level in Three Months on Intense International Crackdown

February 6, 2018 at 14:12 by Yahia Barakah

The price of a single Bitcoin has lost about 60% its highest value, which was reached in December 2017, as global efforts to regulate or ban the digital currency weighed down on it. Bitcoin fell sharply to break below the $6,000 mark for a brief moment on Tuesday, before cutting some of its losses.

News emerged on Monday that authorities in China will widen their crackdown on cryptocurrency trading by restricting access to websites that offer trading services. Chinese regulators already have a ban in place on domestic cryptocurrency exchanges since last year. However, the new decision extends the ban to include foreign and overseas exchanges and trading platforms that facilitate trading.

Authorities will make use of the Great Firewall of China, which allows the Chinese government to have a strict control over internet activity within the country, to block access to such websites. Reports also added that the new decision also includes websites and firms that offer initial coin offerings.

The move comes at a time when South Korea has already banned the use of anonymous bank accounts to fund Bitcoin trading and prevented exchanges from opening new trading accounts. The Indian government also announced that Bitcoin is not considered a legal currency and thus regulators will work on banning it.

Meanwhile in the West, a number of major banks and financial institutions aimed to limit their exposure to Bitcoin’s volatile movements by blocking cryptocurrency purchases. Holds of credit cards issued by JP Morgan, Capital One, Discover, Bank of America, and Citigroup will no longer be able to buy Bitcoins using their cards. These financial institutions represent the top five card issuers in the United States.

In the United Kingdom, Lloyds Bank also decided to apply the same restriction. The bank announced that the decision also applies to its subsidies, including Bank of Scotland and Halifax. Lloyds Bank is the largest bank in the country.

Further worsening the situation for Bitcoin was reports about escalated legal actions against Bitfinex, one of the world’s largest cryptocurrency exchanges. The Commodities and Futures Trading Commission has reportedly sent a subpoena to the exchange of charges related to a suspected scam related to a cryptocurrency called Tether.

Bitfinex claims that Tether, which currently has a market cap of $2.3 billion, is pegged to the US dollar, but has not been able to provide ample evidence for this claim. Investors and observers have grown more doubtful in recent weeks that this claim will prove to be true when investigated.

BTC/USD traded at 7,077.3 on the Bitstamp exchange as of 13:45 GMT on Tuesday after touching 5,962.3 at 07:55 GMT, the pair’s lowest level since November 2017. BTC/USD began trading today at 6,965.7.

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