Bitcoin price dips below key level as Russia prepares for a blanket crypto ban

Posted: 20 January 2022 10:47 pm
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Russia’s central bank has called for legislators to issue an outright ban on the country’s local trading and mining markets.

  • Bitcoin’s annual gains now stand at just 11%.
  • The US Securities and Exchange Commission (SEC) has rejected SkyBridge’s spot BTC application.
  • New York City (NYC) mayor Eric Adams recently accepted his first official paycheck in Bitcoin and Ethereum.

Things seem to be going from bad to worse for Bitcoin (BTC). The flagship crypto dipped below the all-important $40,000 psychological threshold after having climbed up to the $43,000 mark — all within the span of the last 24 hours. As a result, BTC is now exhibiting a weekly loss ratio of 6.7% while trading at $35,340.

This ongoing turmoil seems to stem from a recently issued report from the Central Bank of Russia. Titled “Cryptocurrencies: Trends, risks, measures,” it calls for an unequivocal, blanket ban on the country’s local digital asset trading and mining sectors. Using a host of old narratives, the authors of the study likened cryptocurrencies to a Ponzi scheme and claimed they were mostly being used to facilitate illegal activities within the region.

The report also noted that the asset class as a whole was extremely volatile and posed a massive threat to Russia’s financial sovereignty. Lastly, the central bank claimed that the country’s blossoming mining industry posed a threat to its existing green energy agenda. It added:

“Crypto mining creates a non-productive electricity expenditure, which undermines the energy supply of residential buildings, social infrastructure and industrial objects, as well as the environmental agenda of the Russian Federation.”

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SkyBridge’s BTC spot ETF application sees red

After a number of delays and official deferments, the US Securities and Exchange Commission (SEC) released a statement revealing that it had decided to reject SkyBridge’s long-pending Bitcoin spot exchange-traded fund (ETF) request, citing a proposed rule change from the New York Stock Exchange (NYSE).

Elaborating on its stance, the SEC noted that if it were to have approved of the offering, it would have failed to act in the best interest of American investors, knowingly putting them in the way of various “fraudulent and manipulative acts and practices.” SkyBridge first applied for a Bitcoin ETF with the NYSE during Q1 2021, but its request was delayed twice by the SEC — once during July and again at the end of the year.

NYC mayor accepts his first paycheck in Bitcoin

On January 20, current NYC mayor and long-time crypto proponent Eric Adams revealed that he had accepted his first paycheck from the US government in the form of Bitcoin and Ethereum. That said, the salary will not be credited directly in crypto but will initially be issued in fiat and later converted into the digital assets of his choice via prominent trading platform Coinbase.

Existing state-level regulations do not allow resident US employees to draw a salary in crypto, an issue compounded by the fact that the Internal Revenue Service (IRS) classifies digital currencies as property, making their taxation status extremely murky. On the development, Mayor Adams was quoted as saying:

“New York is the center of the world, and we want it to be the center of cryptocurrency and other financial innovations.”

Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.

Disclosure: The author owns a range of cryptocurrencies at the time of writing.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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