US investigating bitcoin price manipulation as cryptocurrency runs wild

The Justice Department has opened a criminal investigation into the possibility that the prices of bitcoin and other cryptocurrencies are being manipulated by traders, according to Bloomberg. The probe...

The Justice Department has opened a criminal investigation into the possibility that the prices of bitcoin and other cryptocurrencies are being manipulated by traders, according to Bloomberg.

The probe is centered around spoofing, an illegal practice in which an investor floods the market with fake orders to distort the price of an asset. It’s reportedly being conducted in tandem with the Commodity Futures Trading Commission, the financial regulator which oversees derivatives tied to bitcoin.

The price of bitcoin fell to $7,364 in the wake of Thursday’s report from Bloomberg, from an overnight peak of $7,718. That’s a decrease of 4.6 percent.

The bitcoin market’s meteoric rise and massive volatility has led to some countries, including China, to ban the cryptocurrency, while others scramble to regulate it. In the US, the chairman of the Securities and Exchange Commission has warned of the risks associated with cryptocurrency investment and noted that they hold substantially less investor protection than traditional securities markets.

The Justice Department and CFTC didn’t immediately respond to requests for comment.

Department has opened a criminal investigation into the possibility that the prices of bitcoin and other cryptocurrencies are being manipulated by traders, according to Bloomberg.

The probe is centered around spoofing, an illegal practice in which an investor floods the market with fake orders to distort the price of an asset. It’s reportedly being conducted in tandem with the Commodity Futures Trading Commission, the financial regulator which oversees derivatives tied to bitcoin.

The price of bitcoin fell to $7,364 in the wake of Thursday’s report from Bloomberg, from an overnight peak of $7,718. That’s a decrease of 4.6 percent.

The bitcoin market’s meteoric rise and massive volatility has led to some countries, including China, to ban the cryptocurrency, while others scramble to regulate it. In the US, the chairman of the Securities and Exchange Commission has warned of the risks associated with cryptocurrency investment and noted that they hold substantially less investor protection than traditional securities markets.

The Justice Department and CFTC didn’t immediately respond to requests for comment.

 

Source: CNET

Featured Image: Getty Images 

 Inset Image: AP Photo/File 

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