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Feds Open Probe Into Bitcoin Price Manipulation: Report

The United States Department of Justice and the Commodity Futures Trading Commission have opened a joint criminal investigation into price manipulation and other cryptocurrencies, according to a Bloomberg report .

The illicit tactics reportedly being investigated include spoofing and wash trading.

Bitcoin's share price has fluctuated wildly over the past year, ranging from US $ 1,800 to almost $ 20,000, leading to rumors of price manipulation.

News of the joint DoJ-CFTC probed bitcoin's share a six-week low. The cryptocurrency's price was $ 7,545 at mid-day Thursday.

The probe "will help the market," said Darryll DiPietro, CEO of
Concierge Club.

"Once everyone gets under a microscope, it will be difficult for them to launch IPOs," he told the E-Commerce Times. "I am not able to regulate myself – I believe in a decentralized market – but I'm in charge of controlling those sh * tty companies.

Both DoJ spokesperson Nicole Navas Oxman and CFTC Spokeswoman Donna Faulk-White declined to comment on this story.

Market Manipulation Murmurs

 
Back in 2017, Hackernoon ran a story alleging

A single entity dubbed "Spoofy" was responsible for
Hackernoon ran last year.

Spoofing and engaging in wash trading, according to the report, and having come up with a scheme it named "Tether."

That article
sparked considerable comment.

An academic
Gox exchange in Japan, drew media attention earlier this year. .

The CFTC earlier this month. Also, two CFTC officials mentioned the possibility of regulating cryptocurrencies, the proposal cooperation between the CFTC and the SEC

The CFTC has issued an advisory warning of the virtual currency pump-and-dump schemes.

"We're facing a speculative bubble in which the market has not yet been determined by the cryptocurrencies," said Andreas Scherer, managing partner at Salto Partners.

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Cryptocurrencies are "still a relatively small fraction of the global financial transaction volume," he told the E-Commerce Times, and did not yet implement the common safeguards in place at established stock exchanges. "So, known manipulation strategies such as spoofing occur unmitigated."

Cryptocurrency Scams

Twitter, Google and Facebook have banned cryptocurrency ads due to the high level of scams in the field.

Of nearly 1,500 cryptocurrency tested offerings, 271 – or about 20 percent – were dubious, a Wall Street Journal
investigation found. Among the suspicious findings were missing or fake executive teams, the use of plagiarized investor documents, and promises of guaranteed returns.

Banks generally have downplayed bitcoin, and JP Morgan Chase CEO Jamie Dimon last year took several shots at the currency,

Several countries, including China, have banned bitcoin.

"The governments and major banks are trying to manipulate the market," DiPietro remarked.

The banks are likely to be targeted by the DoJ because "it's going to be important," he said, adding that Facebook has been working on its own cryptocurrency, and thus has an ulterior motive.


Richard Adhikari has been an ECT News Network reporter since 2008. His areas of focus include cybersecurity, mobile technologies, CRM, databases, software development, mainframe and mid-range computing , and application development. He has written and edited for numerous publications, including Information Week and Computerworld . He is the author of two books on client / server technology.
Email Richard.