The crypto market is down today, as a slew of negative news events weigh on Bitcoin, Ether and altcoin prices. 

After jumping to yearly highs, Bitcoin 

BTC

$22,616

 and Ether 

ETH

$1,651

 retraced a portion of their year-to-date gains and the primary downside catalyst appeared to be an announcement that the United States Department of Justice would reveal enforcement action against Bitzlato and ramp-up pressure on certain players in the crypto sector.

Volatility in the stock market was accompanied by major tech industry layoffs and comments on interest rate policy by the St. Louis Federal Reserve President, James Bullard.

After initially benefitting from a Consumer Price Index (CPI) print which showed inflation slowing beyond expectations in December 2022, crypto and stocks started up then began cooling as retail data missed expectations.

U.S. crackdown on Bitzlato exchange sends shivers through the crypto market

The cryptocurrency industry and regulators have a long history of not getting along either due to various misconceptions or mistrust over the actual use case of digital assets. On Jan. 18, the US Department of Justice shuttered Russian exchange, Bitzlato and the initial announcement from the DOJ suggested that strong actions would be taken against the crypto sector, but the message was not specific. This raised fear among crypto market participants and sent the market into a brief downward spiral.

Without a working framework for crypto sector regulation, different countries and states have a plethora of conflicting policies on how cryptocurrencies are classified as assets and precisely what constitutes a legal payment system.