The US launches an investigation into Bitcoin price manipulation
The US launches an investigation into Bitcoin price manipulation
The investigation is set to look into practices like trade spoofing, or flooding, where fake orders are generated and cancelled to create the appearance of increased demand for specific cryptocurrencies. Other forms of illicit trading are also being investigated, like wash trades where traders trade with themselves to generate artificial market demand.Â
These practices can be used to give buyers a false impression of activity, causing some to invest in cryptocurrencies. There have been claims that some traders have made $1 million spoof orders that are never executed. Â
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Today Bitcoin is worth $7,497.31, a $1000 reduction when compared to Sunday’s value of $8500, showcasing the volatility of the cryptocurrency. Earlier today the currency was valued at $7,272, the lowest cost of the currency since April 12th.Â
This investigation can be seen in one of two ways, depending on the outcome of the inquiry, if illegal market manipulation is found it will have a hugely negative impact on the cryptocurrency market, though if it isn’t, it will act as legitimisation for the market, inviting further investment from financial analysts. The end of this investigation will likely bring with it regulations from the US government, who have already attempted to regulate ICOs (initial coin offerings) due to the sheer number of fraudulent groups who use them to take advantage of the cryptocurrency boom.Â
You can join the discussion on the US’ investigation into Bitcoin price manipulation on the OC3D Forums.Â