From February 24 to 28, the virtual asset market showed weakness as U.S. President Donald Trump reignited concerns over a "tariff war."

By Research Institute. Updated February 28, 2021. From February 24 to 28, the virtual asset market showed weakness as U.S. President Donald Trump reignited concerns

From February 24 to 28, the U.S. "Trump 2nd Administration"'s concerns over a ‘tariff war’ and last weekend’s hacking incident at Bybit, the world’s second-largest exchange, pushed the virtual asset market further down. Experts advise that premature investment should be approached with caution for the time being.

As of 5 p.m. on the 28th of last month, the price of Bitcoin was recorded at $78,896 per coin, showing a 19.7% decrease from a week earlier. This marks the first time Bitcoin has fallen below $80,000 since November of last year. In a similar vein, the price of Ethereum, the leader among altcoins, decreased by 24% from a week earlier to $2,095. Moreover, most altcoins, including Ripple, BNB, and Solana, plummeted by 13% to 27%.

This is attributed to concerns over a tariff war triggered by the "Trump 2nd Administration" affecting investor sentiment towards risk assets. President Trump previously expressed his intention to impose a 25% tariff on steel and aluminum from Canada and Mexico. Additionally, trade tensions escalated as China announced retaliatory tariffs. Now, the emergence of stagflation, where inflation and an economic recession occur simultaneously, is becoming a concern.

Choi Seung-ho, a researcher at the Research Institute, remarked, "As the U.S.-led trade disputes continue, selling pressure driven by risk aversion is intensifying." He further added, "There is a possibility of a rebound buying trend focused on the assets that have plummeted, but caution is needed as the short- to medium-term downward trend has not reversed yet."

◇ Bybit faces largest hacking incident in history… $1.4 billion worth of Ethereum stolen

On the 21st of last month, global virtual asset exchange Bybit suffered a hacking attack resulting in the theft of $1.46 billion (about 1.9 trillion won) worth of Ethereum. This hacking incident is suspected to be the work of the North Korean hacker group "Lazarus." Bybit has decided to directly purchase the stolen Ethereum to recover its assets.

As a result of this incident, the use of personal wallets (cold wallets) and decentralized finance (DeFi) is being considered as an alternative. However, experts advise that cautious choices are necessary depending on the investor's capabilities. While cold wallets allow for the secure storage of assets, losses incurred due to personal responsibilities, such as losing seed phrases or transfer mistakes, are difficult to recover from. Decentralized exchanges also carry hacking risks, and there is no means to receive compensation in case of losses.

◇ Trump's meme coin controversy… Need for virtual asset regulation highlighted

President Donald Trump has issued the 'Official Trump' token, escalating the debate surrounding the legal status of meme coins. Ahead of his inauguration, President Trump unveiled the virtual asset 'Official Trump' via his social media (SNS). The coin skyrocketed to $75 just a day after its release, briefly placing its market capitalization at 20 trillion won.

In response to this, the Democratic Party in the U.S. House of Representatives is pushing a bill to prohibit public officials from issuing virtual assets. The bill, named the "Unpaid Official Web3 Issuance and Recovery Act," aims to ban the president, vice president, federal congressional members, and senior government officials from issuing, selling, holding, or profiting personally from any virtual asset. It is also proposed to recover any gains made through such activity.

Representative Sam Ricardo, who introduced the bill, criticized President Trump for exploiting finances by issuing meme coins and engaging in cryptocurrency speculation. He stated, "Political authority should not be used to pursue personal gains. Especially in today's society, where the economy is rapidly changing and new technologies are emerging, government officials should set an example with integrity and focus on serving the public interest."

On the other hand, the Securities and Exchange Commission (SEC) under the U.S. Treasury has issued guidelines classifying meme coins as "collectibles," indicating an intent to ease regulatory burdens. The corporate finance office explained in a statement that meme coins do not fall under securities laws, thus not subjecting their issuance and trading to securities law.

Consequently, holders of meme coins will not be covered by the protections of federal securities laws, and issuers are exempt from registration obligations. However, those who sell meme coins with the intent to deceive investors may still be subject to relevant state or federal laws. In addition, issuers will still need to comply with applicable state property, banking, and money services business laws.

The virtual asset industry reports that the controversy surrounding President Trump's issuance of meme coins has again highlighted the need for legal oversight and regulation. A representative from the Research Institute stated, "Speculative assets like meme coins are falling into regulatory blind