The US Department Of Justice Looking For Bitcoin Manipulations
The US Department of Justice has launched a probe into illicit value manipulations of the world’s biggest cryptocurrency. The major concern is that the volatility and price swings might make it easy for traders to abuse the environment of the virtual currency.
The investigation is focusing in the Commodity of Futures Trading and Commissions. They are the regulatory entity that authorized all of the licensing for Bitcoin contracts. This happens at the Chicago Board Options Exchange and the Chicago Mercantile Exchange. Two of the US’s major trading exchanges.
News of the investigation comes from anonymous sources from within the DOJ. They remain unnamed and are not authorized to comment on detailed matters of the probe. However, we do know from the sources that the investigation is pertinent to worries of manipulation regarding the values of cryptocurrencies Bitcoin and Ethereum.
Why It Is Vulnerable?
The officials are concerned that cryptocurrencies are vulnerable to fraudulent behavior for a number of reasons at least, namely:
- The cynicism that all exchanges are actively going out for swindlers.
- Due to the notorious volatility in price valuations, could make it possible to manipulate the values without flagging unwarranted notice.
- The difficult to protect users and traders owing to the lack of regulations that control stocks and assets.
Eventually the investigation is not looking into cryptocurrency exchanges in particular. It has a focus on finding malicious traders who could be abusing the unregulated space to manipulate the system. The key of the probe is towards “spoofing” and “wash trading” – which are tactics of market manipulation market to produce a particular outcome or asset value.
The investigation was first publicized by Bloomberg on May 24th, and we can look at the data to see how Bitcoin traders have reacted to the news of both the probe and the potential asset manipulation.