Bitcoin, the prime crypto asset, plunged to a three-week low overnight. Its value dropped to $52,000 from $60,000 in what was the biggest intraday drop in Bitcoin value since February.
The downward trend was seen all over the Crypto market as Ethereum dropped to $1970 from $2260 in a day. The plunge is being linked to rumors that the U.S financial regulators are about to charge several financial institutions over the use of digital assets for money laundering.
The unconfirmed news was broken by FXHedge – a Twitter account with over 122,000 followers. The tweet has since gone viral, creating panic among traders.
U.S. TREASURY TO CHARGE SEVERAL FINANCIAL INSTITUTIONS FOR MONEY LAUNDERING USING CRYPTOCURRENCIES -SOURCES
— FXHedge (@Fxhedgers) April 18, 2021
Money laundering through crypto-assets has remained a constant concern for financial regulators around the world. The concerns have prompted some governments to announce all-out bans on crypto trading while others have announced strict protocols regarding the disclosure of such assets.
An investigation was also launched against the crypto exchange Binance over allegations that it allowed U.S residents to trade derivatives without government oversight.
The latest news resulted in a liquidation of $7.6 billion in an hour, bringing Bitcoin down by 13%. At the time of writing, Bitcoin is posting a recovery and is valued at over $55,000. Binance coin also fell from a 24-hour high of $520 to under $440 and is currently valued at $480.