After Bitcoin reached $65,279, it dropped back down. The U.S. SEC unexpectedly accused the well-known "MetaMask" wallet of operating without a license. Its parent company, Consensys, subsequently sued the SEC, attempting to classify Ethereum as a security. This created significant noise in UK and US regulatory circles, enabling UK law enforcement to seize crime-related crypto assets immediately without a conviction. The U.S. Federal Bureau of Investigation (FBI) warns against using unregistered cryptocurrency transmission services.
The SEC accuses the MetaMask wallet of acting as an unlicensed broker-dealer, violating securities laws. A broker-dealer is a financial entity that conducts securities transactions on behalf of clients but can also trade for itself. It acts as a broker or agent when executing orders for clients; it acts as a dealer or principal when trading for its account.
MetaMask's backing Ethereum startup, Consensys, appears to retaliate, claiming the SEC's actions are excessive, attempting to "control the future of cryptocurrencies."
A 34-page complaint excerpt reads, "The U.S. Securities and Exchange Commission is attempting to regulate Ethereum as a security, even though Ethereum possesses none of the attributes of a security, and the SEC had previously informed the world that Ethereum is not a security and does not fall under its legal jurisdiction."
Consensys has filed a preemptive lawsuit against the financial regulatory authority, having received a Wells Notice from MetaMask, a document known to precede regulatory actions. This is why Consensys initiated a counterattack, asking the federal court to declare Ethereum is not a security, to prevent the SEC from overreaching.
Given that the SEC has not responded directly, the status of Ethereum as a security or commodity remains unclear, unlike the Commodity Futures Trading Commission (CFTC), which calls Ethereum a commodity. Designating it as a security would be detrimental to many U.S. companies, which might face the wrath of the SEC for trading unregistered securities.
Ethereum co-founder and Consensys CEO Joe Lubin emphasized in a press release that his resistance to the regulators "aims to preserve access for thousands of developers, market participants, and institutions that hold Ethereum shares."
Rare regulatory bombshells from the UK and US
According to The Block, the U.S. FBI stated on Thursday that Americans should not use cryptocurrency transmission services offered by companies not registered as Money Services Businesses (MSB) under federal law. Additionally, the FBI provided FinCEN's official tool, allowing users to check whether a company is registered as an MSB.
Furthermore, the FBI warned users not to use crypto services that do not require "Know Your Customer" (KYC) information before allowing the sending or receiving of cryptocurrency.
The statement said the FBI recently enforced against unlicensed cryptocurrency services. Those using unauthorized cryptocurrency transfer services might face financial disruptions during enforcement, especially if their cryptocurrencies are mixed with funds obtained through illegal means.
"Intentionally illegal or knowingly aiding illegal transactions, cryptocurrency transfer services will be investigated by law enforcement. Using services that fail to fulfill their legal obligations might cause you to lose access to your funds following enforcement actions against these businesses," the statement mentioned.
According to CoinDesk, the UK Home Office stated in a press release on Friday that new powers enabling law enforcement to seize cryptocurrencies used in crimes are now effective.
The UK Home Office announced that due to these new regulations, the country's police will no longer need to arrest someone before seizing their crypto holdings, making it easier to confiscate assets known to be obtained through criminal means, even if seasoned criminals manage to protect their anonymity or are overseas.
These regulations were introduced following the passage of the crime bill last year in the UK Parliament, which laid the groundwork for faster seizure of cryptocurrencies.
Chief Royal Prosecutor Adrian Foster said in the press release, "It is crucial for investigators and prosecutors to have the capability and flexibility to keep up with the changing nature of crime, and these new measures will greatly assist us in restraining, freezing, or eliminating cryptocurrency assets within illegal enterprises."
UK officials will also be able to transfer cryptocurrencies to wallets controlled by law enforcement agencies. If reintroducing these cryptocurrencies into circulation is not in the public interest, they will also be able to destroy these assets. The press release noted that privacy coins, a type of asset, might be destroyed if confiscated.
Bitcoin Technical Analysis
CMTrade states that Bitcoin's RSI trading below 30 could mean the price is either in a continued downward trend or merely oversold, thus potentially forming a rebound, in which case look for bullish divergence.
MACD is below its signal line and in negative configuration.
Moreover, the price is lower than the 20 and 50 period moving averages, at $63,880 and $64,269 respectively.
Bitcoin/USD is trading above its Bollinger band lower limit, positioned at $63,078.
"Our pivot point is at $64,380, and our preference is that as long as $64,380 is a resistance level, the downward trend will prevail."
"Another scenario is to look for $65,910 and $66,820 above $64,380."
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