The US Department of Justice initiated a criminal investigation to determine whether traders are manipulating the rate of bitcoin and other digital currencies. This is reported by Bloomberg.
The investigation is aimed at identifying illegal practices that can be used to manipulate courses, including spoofing or filling the market with fake orders to mislead other traders and induce them to buy or sell crypto currency, an anonymous source said. They are also interested in fictitious transactions aimed at creating a false impression of active trade. Representatives of the Ministry of Justice work together with the Commodity Futures Trading Commission.
There’s very little monitoring of manipulative trading, spoofing and wash trading. It would be easy to spoof this market.
Finance professor, University of Texas
Authorities are concerned about the possibility of fraud in the cryptocurrency market for several reasons: they are not sure that exchanges are actively fighting those who can use dishonest practices, while opportunities for their application are present, and proper regulation is not.
The investigation is at an early stage, the source said. Representatives of the Ministry of Justice and the CFTC declined to comment on the situation.