LONDON – Major cryptocurrencies remain under pressure on Tuesday morning as the market continues to digest Monday’s news that several financial regulators are cracking down so-called Initial Coin Offerings.
The initial fall of both Bitcoin and Ethereum on Monday was triggered a crackdown on so-called Initial Coin Offerings (ICOs) in Asia. ICOs are where startups raise money by issuing new digital currencies or tokens that can be traded online.
China announced a ban on ICOs on Monday, declaring them illegal, and South Korea pledged to “strengthen levels of punishment” for those looking to raise money through ICOs. Both countries follow the US, which ruled in July that ICOs must adhere to strict securities laws.
Those falls have continued into Tuesday, with both ethereum and bitcoin losing around 2.5% more overnight. Ethereum had lost as much as 20% during trade on Monday, having been worst hit by the ICO crackdown.
Ethereum’s blockchain is the most popular platform to use when hosting an ICO – its blockchain allows people to write “smart contracts” that will release new tokens to investors when a certain amount of Ether, the digital currency that powers Ethereum, is received.
Here’s how the currency looks just before 8.00 a.m. BST (3.00 a.m. ET):
And here is how bitcoin looks at the same time:
Further falls could be on their way, with a China-focused executive from trading platform eToro describing the ICO crackdown as a “huge deal.”
“It’s bigger than most people think it is,” Adam Efrima, the operations director of eToro’s Chinese business told Business Insider on Monday.