Crypto Market Grows as SEC Takes Steps to Protect Investors
Cryptocurrency has become increasingly popular in recent years due to the sudden rise in Bitcoin’s value, enabling it to become the most valuable cryptocurrency on the market with a market value of billions of dollars.[0] This has been driven by the massive adoption of cryptocurrencies by key players like PayPal and Xbox, as well as the increasing investments in venture capital and digital assets.
At its core, blockchain is a type of database that records a list of transactions.[1] These transactions can be for anything, and when it comes to cryptocurrency, it records the changing ownership of money. Blockchain is managed by a global peer-to-peer network, consisting of millions of computers in the case of Bitcoin.[2]
The recent collapse of the cryptocurrency exchange FTX serves as a reminder of the fragility of the cryptocurrency market. The exchange had a liquidity crisis in November, triggered by reports that the FTX-linked investment firm, Alameda Research, relied heavily on FTX’s in-house token, FTT. This prompted a domino effect, with the company filing for bankruptcy, many ties with other platforms being affected, and a class-action lawsuit filed against FTX that also named the celebrities that endorsed the platform.[3]
The SEC has issued 127 enforcement actions since 2013, with 30 of those being crypto-related in 2022 alone.[4] Of the 30 crypto-related enforcement actions in 2022, 14 were related to initial coin offerings (ICOs), and 57% of these ICO-related actions included a fraud allegation.[4] It’s clear to see the SEC is taking steps to protect investors, with the SEC’s Crypto Assets and Cyber Unit expanding its workforce to investigate securities law violations in the crypto markets.
Buying and storing cryptocurrency is relatively straightforward. You can buy cryptocurrency with digital currencies, create your own offer, or use an online platform known as a Crypto Exchange. You can then store your currency in a Crypto Wallet and manage it as you see fit.
Due to the decentralised nature of cryptocurrency, it does not come under the influence of any central authority, meaning it is harder to influence by external parties.[1] This is a major reason for the increased investment in cryptocurrencies, with companies like FTX, Alameda Research, and the many other platforms looking to get involved in the sector.
In conclusion, cryptocurrency is an ever-growing market, with the SEC taking steps to protect investors.
0. “United States Hardware Wallet Markets, Competition, Forecast …” www.businesswire.com, 31 Jan. 2023, https://www.businesswire.com/news/home/20230123005559/en/United-States-Hardware-Wallet-Markets-Competition-Forecast-Opportunities-2022-2028-Increasing-Investments-in-Cryptocurrency-Based-Devices-and-Increasing-Use-of-NFC—ResearchAndMarkets.com
1. “The dirty secrets of cryptocurrency explained | Stuff.co.nz” www.stuff.co.nz, 31 Jan. 2023, https://www.stuff.co.nz/environment/climate-news/130736196/the-dirty-secrets-of-cryptocurrency-explained
2. “Cryptocurrency mining, which relies on abundant power, expanding …” nonpareilonline.com, 31 Jan. 2023, https://nonpareilonline.com/business/cryptocurrency-mining-which-relies-on-abundant-power-expanding-in-iowa/article_17151507-5a07-5398-a13d-971d92691f5b.html
3. “What Is FTX Cryptocurrency and What Went Wrong? | Morgan …” www.forthepeople.com, 31 Jan. 2023, https://www.forthepeople.com/blog/what-ftx-cryptocurrency-and-what-went-wrong/
4. “Cornerstone Research: SEC Tightens Cryptocurrency Enforcement” www.prweb.com, 31 Jan. 2023, https://www.prweb.com/releases/cornerstone_research_sec_tightens_cryptocurrency_enforcement/prweb19120222.htm
