On Wednesday, many altcoin investors once again got the feel of late 2022, and the feeling was hardly pleasant. I’ve seen a noticeable decline.
For example, as of late afternoon, Memecoin dogecoin (doge -2.29%) down nearly 4% in the last 24 hours, Polka dot (Dot -4.54%) fell more than 6%, Chronos (CRO -8.76%) It was down 9%. The temporary rally in the top cryptocurrencies was a drag that dragged down most coins and tokens.
There is no such thing as massive government enforcement action to dampen the rally. Sure enough, the Justice Department has announced that Anatoly Legkodymov, the founder of cryptocurrency exchange Bitzlato, has been arrested on suspicion of making unauthorized money transfers. This follows an announcement by the DOJ that it broke the news of a major cryptocurrency regulation implementation, rocking the market.
At a press conference about Legkodimov’s arrest, federal prosecutor Breon Pease said, “Institutions trading cryptocurrencies are not above the law and their owners are beyond our reach. No,’ he said. In other words, crypto developers and exchanges, watch your back because we’re watching you.
No one accuses Dogecoin, Polkadot and Cronos of similar fraud involving huge sums of money. However, the DOJ’s high-profile arrest and subsequent press conference represent yet another blemish on cryptocurrency’s reputation. They continue to engage criminals, but do little to boost investor viability morale.
It is too early to tell whether this has killed the recent cryptocurrency rally completely. Invigorated by the possibility of stopping, my guess is they will recover soon. This benefits investments that are considered relatively speculative, such as digital coins and tokens.
Eric Volkman has no positions in any of the mentioned stocks. The Motley Fool has no positions in any of the companies mentioned. The Motley Fool’s U.S. headquarters has a disclosure policy.