Why is the Crypto Market Down Today?

The crypto market is down todayafter fallout from Silvergate Bank and a U.S. regulator-led lawsuit against KuCoin weighed on investor sentiment.

It has been a rough couple of days for the crypto market, as the fallout from Silvergate Bank's legacy business issues and a U.S. regulator-led lawsuit against KuCoin have weighed heavily on investor sentiment.

On Wednesday, Silvergate Bank reported that it had recorded a $10.2 million, or $1.73 per share, net loss in the second quarter, citing lower than expected revenue and higher than expected expenses.

The bank, one of the major players in the crypto space, attributed the net loss to "high levels of turnover in client-related activities and investments, declines in prices of certain client investments and certain non-client related investments, and higher provisions for loan losses."

In addition to the losses suffered by Silvergate, the crypto market was hit by news that the U.S. Securities and Exchange Commission (SEC) had filed a lawsuit against KuCoin, one of the largest crypto trading platforms in the world.

The SEC accused KuCoin of offering unregistered securities to U.S. investors, and alleged that the platform had earned around $2.9 million in profits from these activities.

The lawsuit has caused a stir in the crypto market, as investors fear that other trading platforms could be next in line for similar action by the regulator.

With the crypto market still in its infancy and the risk of further regulatory action looming, investors are now approaching the space with caution.

At the time of writing, the total market capitalization of the crypto market stands at $334 billion, down 3.2% on the day.

It remains to be seen how the crypto market will react going forward, but with investor sentiment still fragile, it could be some time before the market recovers.