Criminal Investigation Regarding The Bitcoin Price Manipulation Has Been Opened By The U.S. Department Of Justice
On may 25th Bloomberg announced that the U.S. Department of Justice has apparently started a criminal investigation regarding the price manipulation of bitcoin on major trading platforms.The DOJ is going to define whether money dealers are trying to manipulate the costs of Bitcoin, Ether and perhaps different digital forms of money. On this occasion government prosecutors are working as a team with the Commodity Futures Trading Commission (CFTC) on the investigation of the mentioned case.
In fact, what is the U.S. government so concerned about? Actually there are two schemes that are being used by the cheaters. The first one is that regulators pay close attention to is order forgery. This includes filling the market with fake orders to cheat other traders into buying or selling due to alleged demand that doesn’t really exist. The trader submits several orders and then cancels them as soon as the BTC (or any other coin) is moving in the right direction.
The second one is the scheme of wash trades – when a cheating trader executes trades with himself to give a false impression of market demand that seduces other to be involved in this kind of transactions. As per SEC regulators both schemes are illegal, it’s only that there has never been a formal investigation with regards to Bitcoin before now. Bloomberg’s sources demonstrated that its really Bitcoin and Ethereum subordinates that are under investigation, not spot traders.
Bitcoin continued its decrease on Thursday after the story broke earlier today. Prices quickly plunged to below $7,300 at 9:15 am CST before mobilizing toward the evening to over $7,500. BTC is down 20 percent since a May 5th crest of $9,895.