Youdao (DAO) saw a significant 5.01% decline in its stock price during Tuesday's pre-market trading session, as the cryptocurrency market faced heightened regulatory scrutiny and concerns over potential risks associated with digital assets.

The plummet can be attributed to news of the UK's Financial Conduct Authority (FCA) proposing stricter regulations on the cryptocurrency market. The FCA aims to prohibit non-regulated entities from conducting public crypto offerings, with a focus on enhancing consumer protection and mitigating risks.

This regulatory development has raised concerns among investors, as it could impact the operations of companies like Youdao that have exposure to the cryptocurrency market. Additionally, recent incidents involving blockchain bridge vulnerabilities and exploits have further fueled concerns over the risk profile of decentralized finance (DeFi) protocols and bridged assets.