Top cryptocurrencies lost earlier gains after the Federal Reserve signals interest rates to keep rising well into 2023.
U.S. Senators Elizabeth Warren (D-Mass.) and Roger Marshall (R-Kan.) are introducing a bill to crack down on money laundering and financing of terrorists and rogue nations via cryptocurrency.
This article originally appeared in Crypto Markets Today, CoinDesk’s daily newsletter diving into what happened in today's crypto markets. Subscribe to get it in your inbox every day.
If it becomes law, the Digital Asset Anti-Money Laundering Act will bring know-your-customer (KYC) rules to crypto participants such as wallet providers and miners and prohibit financial institutions from transacting with digital asset mixers, which are tools designed to obscure the origin of funds.
The act would also allow the Financial Crimes Enforcement Network (FinCEN) to implement a proposed rule requiring institutions to report certain transactions involving unhosted wallets – wallets where the user has complete control over the contents rather than relying on an exchange or other third party.
Concerns over the use of crypto to facilitate money laundering and terrorist financing are frequently aired by lawmakers or regulators and are often used to highlight the need for more robust regulation of the digital asset industry.
Bitcoin (BTC): The largest cryptocurrency by market capitalization lost hold of earlier gains and was recently trading at $17,800 after the U.S. Federal Reserve raised interest rates another 50 basis points at its last meeting of the year and signaled further increases were likely in 2023. BTC was trading as high as $18,356 right before the Fed’s announcement, over the $18,000 mark for the first time since early November. It’s up 0.5% in the past 24 hours. “Cryptos are getting dragged down as the dollar rallies with the return of risk aversion,” Edward Moya, senior market analyst of the Americas at Oanda, wrote in a Wednesday note.
Equity markets also turned red, with the tech-heavy Nasdaq Composite closing down 0.76%. The S&P 500 was down 0.61% and the Dow Jones Industrial Average was down 0.42%.
Ether (ETH): The second-largest cryptocurrency by market cap after bitcoin similarly followed BTC’s trajectory, sliding around 1% to $1,310 as of publication time. Earlier in the day, PayPal and MetaMask announced the payments company will integrate its buy, sell and hold crypto services with MetaMask Wallet as the companies look to broaden users' options to transfer digital assets from their platforms. Users will be able to buy and transfer ETH from PayPal to MetaMask.
Maple (MPL): Blockchain-based lending platform Maple Finance unveiled Wednesday a major protocol overhaul in an attempt to improve on shortcomings highlighted by a spate of recent loan defaults. The upgraded version includes improvements on the withdrawal request process, introducing an option to schedule and prorate withdrawals. Maple Finance's native MPL token was trading up as much as 6.9% in the past 24 hours on the news before falling back a 1.7% advance to $3.80, according to price tracking site CoinGecko