- Bitcoin hit an almost three-month low on Thursday after a regulatory probe into cryptocurrency exchange Binance added to news that Tesla would no longer accept it for vehicle payments
- The U.S. Justice Department and the Internal Revenue Service have sought information from individuals with insight into the exchange’s business
- It follows a 17-per-cent drop on Wednesday after Tesla chief Elon Musk ditched the cryptocurrency as a payment option over environmental concerns
- Bitcoin slipped on Thursday to US$45,700 (roughly A$59,207) — its lowest since early March — but steadied early this morning
- Still, bitcoin is about 70 per cent higher for the year, and around 1000 per cent higher than its 2020 low of US$3850 (roughly A$4988)
Bitcoin hit an almost three-month low on Thursday after a regulatory probe into cryptocurrency exchange Binance added to news that electric carmaker Tesla would no longer accept it for vehicle payments.
Blomberg reported yesterday that as part of the Binance inquiry, the U.S. Justice Department and the Internal Revenue Service have sought information from individuals with insight into the exchange’s business.
“We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion,” a spokesperson said in an email.
“We have worked hard to build a robust compliance program that incorporates anti-money laundering principles and tools used by financial institutions to detect and address suspicious activity.”
The investigation comes after Germany’s financial regulator BaFin warned last month that Binance risked being fined for offering its securities-tracking digital tokens without publishing an investor prospectus.
Bitcoin slipped on Thursday to US$45,700 (roughly A$59,207) — its lowest since early March — but steadied early this morning at US$49,312 (roughly A$63,887).
It follows a 17-per-cent drop on Wednesday after Tesla chief Elon Musk ditched the cryptocurrency as a payment option over environmental concerns.
He added that Tesla would not sell any bitcoin — having purchased US$1.5 billion (roughly A$1.94 billion) of it earlier this year — and that the company would resume transactions as soon as bitcoin mining moves to more sustainable energy.
Musk then doubled-down later in the day, denouncing the “insane” amount of energy used to produce bitcoin.
Energy usage trend over past few months is insane https://t.co/E6o9s87trw pic.twitter.com/bmv9wotwKe
— Elon Musk (@elonmusk) May 13, 2021
According to data from the University of Cambridge and the International Energy Agency, bitcoin “mining” uses roughly the same amount of energy each year as the Netherlands did in 2019.
“Environmental matters are an incredibly sensitive subject right now, and Tesla’s move might serve as a wake-up call to businesses and consumers using bitcoin, who hadn’t hitherto considered its carbon footprint,” said Laith Khalaf, an analyst at London-based investment platform AJ Bell.
Still, bitcoin is about 70 per cent higher for the year, and around 1000 per cent higher than its 2020 low of US$3850 (roughly A$4988).