surge in the price of bitcoin has some worried that the world’s
most popular cryptocurrency is an asset bubble in an unregulated
was trading close to $1,900 against the US dollar on the Bitfinex
exchange on Friday, pushing the market value of digital currencies to
break through the $50 billion mark.
increasing number of alternative cryptocurrencies, amounting up to
830 “alt-coins,” is
boosting the speculative shift with the price of some plummeting 500
percent over the past week.
speculation among alt-coins has benefited anonymous payment systems
employed by cyber criminals performing wide-scale attacks.
the same time, growth in initial coin offerings (ICOs), which help
blockchain startups to sell their tokens directly to the public to
get capital without any regulatory oversight, is fueling the market,
drawing attention from lawyers and economists.
experts are worried ICOs breach existing securities law.
ICO issues crypto tokens rather than stocks and bonds, but that’s
irrelevant to the substance of the activity, which is raising capital
from the general public.
Capital raising activities need to be
regulated to protect investors. The question is how sophisticated
are these investors?” said
PricewaterhouseCoopers director Ajit Tripathi, as quoted by the FT.
week, a German central bank board member warned the public not to buy
bitcoin, as the bank doesn’t recognize it as a currency, and there
are serious risks of facilitating speculation.
month, Japan moved to tighten regulations on bitcoin trading and
dealing. The measure enforces bitcoin exchanges to register. This
adds costs to their businesses due to the necessity to follow
know-your-customer and anti-money-laundering regulations.
was trading at $1,743 against the US dollar at 2:46 pm GMT on Monday,
retreating from record highs, according to XE Currency Charts.