Bitzlato Scandal Triggers $100 Million Liquidation, Bitcoin (BTC) & Ethereum (ETH) Prices Plunge
After experiencing a surge that began at the beginning of this year, Bitcoin and Ethereum have seen a significant plummet in the past 24 hours. Long traders have lost a total of $100 million worth of assets due to liquidations.
The cause of this decline can be attributed to the allegations of money laundering made against Bitzlato, a relatively unknown cryptocurrency exchange. This news was sufficient to trigger the sharp drop in value.
Specifically, the price of Bitcoin fell from a four-month high of around $21,550 to roughly $20,700, while the price of Ethereum dropped from $1,700 to $1,500.
According to recent allegations, Bitzlato, a Hong Kong-based cryptocurrency exchange, is accused of illegally transferring a total of $700 million in both direct and indirect transactions over the course of several years.
The United States Department of Justice has accused Bitzlato of marketing itself to criminals as a cryptocurrency exchange that did not require any identification or verification, which subsequently led to deposits totaling hundreds of millions of dollars. As a result, the plaintiff is now responsible for the damages caused by the negative impact that Bitzlato’s actions had on the cryptocurrency market.
Statistics provided by CoinGlass indicate that more than $106 million worth of futures bets that gambled on the growth of Bitcoin and Ethereum were liquidated in the last 24 hours, representing over 76% of all futures trades.
It is also alleged in the lawsuit that Bitzlato facilitated the laundering of illegally obtained cash by requiring minimal identification from its customers and that over $4.5 billion in cryptocurrency transactions had been conducted by the exchange since 2018.
As of this writing, Bitcoin is valued at $20,783 (down 2.3% in the last 24 hours), whereas Ether is at $1,527 (down 3.4% in the last 24 hours).