Bitcoin dealt devastating blow amid Bithumb seizure

South Korean exchange Bithumb has allegedly been seized by police, prompting a dive in the price of Bitcoin and the wider cryptocurrency market

Bitcoin has suffered a 3.86% correction this morning on news that South Korean exchange Bithumb has been seized by law enforcement.

The exchange is reportedly accused of selling native BXA tokens for a total of $25 million before not listing the token as promised, which allegedly caused dramatic losses to those who invested.

The decision by Korean police to seize the exchange comes after an amendment that will alter the way in which virtual asset providers report on financial business activity.

Bithumb regularly exceeds $1 billion in daily trade volume, making it the largest exchange in South Korea.

The subsequent plunge in price of Bitcoin will come as a surprise to many traders after it surged through the $12,000 level of resistance yesterday.

Bitfinex CTO Paolo Ardoino believes that the drop in price is natural and a “key characteristic of the asset class”.

Bitcoin’s volatility is a key characteristic as an asset class. It is therefore imperative that exchanges offer institutional-grade connectivity that provides high-level performance in all market conditions.” He said.

“Otherwise it fuels criticism of the digital asset industry as a whole from those that wish to deny how much the space has evolved, and characterise it as prone to dubious practices”.

“This is unfortunate given the vision and commitment of those that have taken bitcoin from being the preserve of hackers to an asset class traded by the world’s biggest and most advanced market making firms.”

From a technical perspective, Bitcoin needs to ensure it closes today’s daily candle above the $11,370 level of support to avoid a dreaded break down in price, which could send price to as low as $10,950.

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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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