The US Department of Justice initiated an investigation to determine the possibility of Bitcoin price manipulation. Bloomberg reported with reference to anonymous sources.
The investigation is handled jointly with the US Commodities Futures Trading Commission (CFTC). This teamwork is designed to identify illegal practices that can be used to manipulate rates of Bitcoin and other cryptocurrencies. It is including spoofing or filling the market with fake orders to mislead other traders and induce them to buy or sell cryptocurrency. They will also pay attention to fictitious transactions aimed at creating a false impression of active trade.
According to the participants of the investigation, spoofing could have a significant impact on the blue-chip prices of Bitcoin and Ethereum.
The US authorities are concerned about the cryptocurrency market abuse. In particular, they are not sure how actively the exchanges are fighting with supporters of illegal practices in the cryptocurrency market.
According to one of the anonymous sources, the investigation is still at the earliest stage. Representatives of the Ministry of Justice and the CFTC have not commented on the situation yet.
Mike Novogratz and Tom Lee about investigation
Billionaire investor Mike Novogratz stated that he is optimistic that the US Authorities finally launched investigation regarding bitcoin price manipulation. He is sure that it will contribute to the long-term health of the cryptocurrency market.
He said in interview with Bloomberg:
“Weeding out the bad actors is a good thing, not a bad thing for the health of the market. Plenty of exchanges have these inflated volume numbers to create some sense of excitement around coins.”
Fundstart’ analyst Tom Lee noted that this investigation is a “really welcome news” because it will provide “adult supervision” for the cryptocurrency markets.
Meanwhile, Bitcoin price continues to decline. Currently, it is trading at $7.516
We’ll keep you posted on the latest news regarding investigation.