Bitcoin (BTC-USD) plunged by about $1,000 on Wednesday, falling below the $10,000 price level once again. Most other major cryptocurrencies -- such as Ethereum, Ripple, bitcoin Cash, and Litecoin -- are also declining.

There are a couple of news items that seem to be weighing on the market today. Most significantly, the Securities and Exchange Commission (SEC) issued a statement on cryptocurrency regulation. And separately, one of the largest cryptocurrency exchanges in the world was experiencing troubling "irregularities" in trading activity.

Gold coin with bitcoin symbol.

Image Source: Getty Images.

Today's cryptocurrency prices

Most cryptocurrencies are in the red on Wednesday. Here's a look at the 10 largest cryptocurrencies by market capitalization, and how much each has fallen over the past 24 hours.

Cryptocurrency

Price in U.S. Dollars

Day's Change

Bitcoin (BTC)

$9,683.70

(9.2%)

Ethereum (ETH)

$736.00

(8.9%)

Ripple (XRP)

$0.82

(10.5%)

Bitcoin Cash (BCH)

$1,077.30

(8.9%)

Litecoin (LTC)

$180.36

(8.5%)

Cardano (ADA)

$0.24

(15.2%)

NEO (NEO)

$95.70

(8.9%)

Stellar (XLM)

$0.31

(8.7%)

Monero (XMR)

$327.97

(3.6%)

EOS (EOS)

$6.22

(11.9%)

Data source: www.investing.com. Prices and daily changes as of March 7, 2018, at 2:30 p.m. EST, and prices are rounded to the nearest cent where appropriate.

The SEC will require cryptocurrency exchanges to register

The main reason cryptocurrencies are dropping on Wednesday is that the SEC announced in a statement that it will require cryptocurrency exchanges to register. There has been a lingering fear among cryptocurrency investors that the SEC and other entities could tighten regulations, so the drop in bitcoin (BTC-USD) and other cryptocurrencies in the wake of this announcement isn't too surprising.

Here's part of the SEC's statement: "If a platform offers trading of digital assets that are securities and operates as an "exchange," as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration."

Binance is having issues, but the extent is unknown

Separately, cryptocurrency exchange Binance suspended trading on Wednesday in response to "irregularities" in trading, which led to rumors that the exchange may have been hacked.

While we don't know the extent or nature of the incident yet, Binance CEO Changpeng Zhao promptly tweeted that "all funds are safe," and that the company is still investigating.

Now what?

The Binance news is likely a secondary concern for cryptocurrency investors, and is just a temporary headwind.

As for the SEC's statement, the biggest issue here is uncertainty. The agency has been attempting to crack down on initial coin offerings (ICOs) for some time, saying that they may technically be unregistered securities (which are illegal). This certainly makes sense, and most people reading this are probably not opposed to cracking down on potential ICO scams.

However, a big question is whether or not the SEC considers cryptocurrencies like bitcoin (BTC-USD), Ethereum, and other major coins to be "securities." Many experts say no, but the SEC's statement is certainly open to interpretation at this point. As an example to illustrate why this could be important, an exchange like Coinbase, which doesn't offer ICO tokens and just focuses on a few major cryptocurrencies, could be exempt from registration.

Ultimately, regulating the cryptocurrency industry could be a good thing. However, until we have clear regulations in place, the uncertainty could create volatility and weigh on cryptocurrency prices, as we're seeing today.

Matt Frankel owns Ethereum and Litecoin tokens. The Motley Fool has no position in any cryptocurrencies mentioned. The Motley Fool has a disclosure policy.