Cryptocurrencies hit again with a collective plunge

After taking a hit for Tesla CEO Musk’s announcement to suspend accepting bitcoin as a means of payment for car purchases, cryptocurrencies are receiving another blow to the head. Cryptocurrency, the world’s largest cryptocurrency exchange, is reportedly under investigation by both the U.S. Department of Justice and the IRS.

On Thursday, just after 1 p.m. EST, Cryptocurrency released a statement in response to Bloomberg’s report that “Cryptocurrency is under investigation by the U.S. Department of Justice and the IRS.

Bloomberg, citing anonymous sources familiar with the matter, said officials in charge of the investigation have sought information from people with intimate knowledge of Cryptocurrency’s business. While the report has caused panic in the cryptocurrency market, Bloomberg made it clear that CoinAn is not currently facing charges or fines.

Founded by Zhao Changpeng, CoinAn is currently registered in the Cayman Islands and has an office in Singapore, but the exchange says it does not have a single corporate headquarters.

In response to Bloomberg’s report, Jessica Jung, a spokeswoman for Coin On, said in an emailed statement

We take our legal responsibilities very seriously and cooperate with regulators and law enforcement. We have been working to build a robust compliance program that includes anti-money laundering guidelines, as well as tools for financial institutions to detect and address suspicious activity.

However, Jessica Jung added in a statement that the company does not comment on specific matters or inquiries. And spokespeople for the U.S. Department of Justice and the IRS declined to comment.

This is the second time in about two months that Cryptocurrency has been investigated. On the evening of March 12, Beijing time, a media outlet cited anonymous sources familiar with the matter as saying that the U.S. Commodity Futures Trading Commission (CFTC) was investigating whether Cryptocurrency was illegally allowing Americans to buy related derivatives. However, reports on the same day said the CFTC, which regulates derivatives trading, was trying to determine whether Coinan, which is not yet registered as a broker with the regulator, allowed U.S. residents to buy and sell digital currency derivatives. Cryptocurrency has not yet been accused of misconduct, and the investigation may not lead to enforcement action.

This week, the cryptocurrency market has been hit by back-to-back crashes. After U.S. stock market hours on Wednesday, EST, Tesla CEO Musk suddenly announced on social media that Tesla would suspend accepting bitcoin as a means of payment for car purchases, less than two months after Tesla’s official website accepted bitcoin payments. Following the news, Bitcoin had fallen 17% in 24 hours, retreating over $10,000 from its highs.

The cryptocurrency quickly sank in the short term following Thursday’s announcement of the Coinan report in question. Bitcoin fell $2,000 in the short term, dropping below $48,000; ethereum fell below $3,600 intraday. According to CoinDesk’s ticker data, as of press time, bitcoin was at $47,859.63, down 11.52% in 24 hours. Ether was at $3,670, down 8.81% in 24 hours. Dogcoin is at $0.3906, down 13.45% in 24 hours.

Coinbase was also “dragged down” as its shares fell more than 10 percent to an intraday low of $252.26. BTIG analyst Mark Palmer believes investors misinterpreted media reports that the Coinbase exchange was being investigated by the U.S. Department of Justice, among others, and that the stock was sold off.