The world of cryptocurrencies experienced intensified turbulence following the legal action against the founders of Samourai Wallet by the United States Department of Justice (DOJ). Bitcoin, Ethereum and other major altcoins witnessed a brief slump in value due to the news, against the backdrop of increasing tensions in the Middle East and instability after Bitcoin halving.
Keonne Rodriguez, CEO of Samourai Wallet, and William Hill, the CTO, have been charged with conspiracy to commit money laundering and operating an unlicensed monetary business, according to an April 24 report from Cointelegraph. Bitcoin’s price plunged by 3.6% within an hour of the DOJ’s announcement, hitting a low of $63,710 before rallying to $64,546 based on CoinMarketCap data.
Ether was not immune to the fall, declining by 2.51% within the same period without showing signs of recovery, and further slipping to $3,158. The premier altcoins also took a significant hit, with PEPE, Shiba, and Dogecoin experiencing declines of 6.4%, 2.7% and 3.2% respectively.
These sudden decreases in the top two cryptocurrencies led to a wide-scale liquidation of long positions. Bitcoin had $33.08 million worth of long positions liquidated in the last 12 hours, while Ether had $29.88 million liquidated. The general cryptocurrency market saw approximately $23 million in long positions liquidated, according to CoinGlass data.
These declines took place amid escalating geopolitical tension in the Middle East, with reports on April 24 of Israeli military attacks on around 40 locations associated with Hezbollah in Southern Lebanon. This event took place just days after the Bitcoin halving incident, adding to the anticipated short-term volatility.
The arrest of the Samourai Wallet founders has been met with apprehension within the crypto community. Voices from the sector have expressed concerns, speculating this might be a part of a more extensive crackdown on cryptocurrencies by the U.S. government. Still, despite the fluctuations, overall investor sentiment in the crypto sector remains resilient, with the ‘greed’ score on the Fear & Greed Index rising to 72 this week.