According to Bloomberg, the U.S. Department of justice (DOJ) began a criminal investigation against traders suspected of manipulating the cryptocurrency market.
Citing sources familiar with the situation, the publication writes that DOJ was attracted to the investigation of the Commission on trade commodity futures (CFTC) to track illegal trade in cryptomeria.
In particular, we are talking about patterns when traders place a huge number of false orders to force other bidders to buy or sell assets, and “money laundering trade”, when a group of traders trade exclusively with each other to create the appearance of heightened market activity and thereby attracting new trading participants.
Authorities believe that cryptocurrency exchanges are a high risk of fraudulent activities, for several reasons, including uncertainty about the effectiveness of the oversight of the management of the sites, constant price hikes, which make any estimates blurred, and the lack of adequate legislation regulating securities and other assets.
Professor of Finance, University of Texas John Griffin (John Griffin) I absolutely agree with the last paragraph. Academician, has long studied the manipulation in the markets, including cryptocurrency, said:
“Few monitors manipulative trading, spoofing and laundering trade. In this market very easily spend the rest.”
It is reported that the investigation is at “an early stage” and while that only applies to markets BTC and ETH. Neither DOJ nor the CFTC has not yet commented on the news of the investigation.
Contrary to the opinion of DOJ, some exchanges are responsible to identify unscrupulous traders. So, Gemini uses technology oversight of the Nasdaq market to prevent fraud and illicit trade.