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Bitcoin falls after SEC warning that trading platforms could be ‘unlawful’

Bitcoin falls after SEC warning that trading platforms could be ‘unlawful’
The price of bitcoin has fallen to a one-and-a-half-week low on Bitstamp, following a warning from the US Securities and Exchange Commission (SEC) that some cryptocurrency trading platforms are “potentially unlawful.”

In a statement posted on its website, the SEC said that if a platform offers to trade digital assets and operates as an “exchange”, it must also register with the regulator as a national securities exchange. “Many platforms refer to themselves as ‘exchanges,’ which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange,” the statement read.

"Although some of these platforms claim to use strict standards to pick only high-quality digital assets to trade, the SEC does not review these standards or the digital assets that the platforms select,” the securities regulator added.

READ MORE: ‘Perfect cryptocurrency’: Kim Dotcom outlines plans for new universal money

Bitcoin, the world’s best-known digital currency, fell 7.53 percent to $9,924 following the statement. It had fallen as low as $9,450 earlier on Wednesday. The sell-off also hit other cryptocurrencies such as Ethereum, Bitcoin Cash and Litecoin.

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