What Exactly is the Market Manipulation the DoJ is Reportedly Investigating?
The bulls should be winning the battle in the cryptocurrency market following Consensus 2018 and the news of NASDAQ and the NYSE making plans to move into this space, but the manipulation of Bitcoin's spot price, most probably related to futures expirations, has seen the market continuously trading up and down within a certain range in 2018 and the Winklevoss twins have sought help from NASDAQ to prevent price manipulation on their Gemini trading platform.
Spoofing and wash-trading are methods of market manipulation, which are illegal in other financial markets and it is not the case, as I have read on Reddit, that this practice 'is not illegal in an unregulated cryptocurrency market.'
Although the CFTC's jurisdiction is the futures and options markets, it can take action where it sees fraudulent spoofing and wash-trading practices on the cryptocurrency exchanges, just as it does in other financial markets.
Here's a video of Max Keiser explaining how market manipulation in other financial markets works;
The Dodd-Frank Act, 2010, prohibits the use of spoofing and the CTFC has previously imposed fines on trader's, or groups of traders for using spoofing methods to manipulate various financial markets, as in the case of a trader, fined 2.8 million USD for using an algorithm to spoof the commodities markets;
Here is a definition of spoofing according to Investopedia;
'Spoofy', as he is referred to in the Investopedia definition above, was assigned this name by an anonymous blogger called Bitfinex’ed, who claimed to have seen evidence of spoofing on Bitfinex;
Bitfinex’ed also posted a video, with the comment "you be the judge" ( I hasten to add that I am not suggesting that Bitfinex still operate in the same way. I only post this content to demonstrate examples of the market manipulation the DoJ is reportedly investigating)
Source; https://hackernoon.com/meet-spoofy-how-a-single-entity-dominates-the-price-of-bitcoin-39c711d28eb4
Another example of spoofing on GDAX can be seen here;
(Again, I do not intend to suggest that this is the current state of play on GDAX)
Bitfinex’ed also had more to say on the subject of wash-trading on Bitfinex;
Bitfinex’ed also posted a video of the wash-trading he had observed on Bitfinex;
One person, who will feel vindicated at the moment is Ronnie Moas, having complained for a while now that Bitcoin is being manipulated;
Price manipulation of this kind is not inevitable, as some fully regulated exchanges will not execute spoofing and wash-trading orders.
So, there we have it and it should be noted that although spoofing and wash-trading are illegal, it still occurs anyway, but let's just hope that most of this kind of activity is rooted-out of the cryptocurrency market soon, because while this rampant manipulation continues, we can only dream of lambos.
I should also say that, whilst it has been reported that there will be an investigation into price manipulation, I have not seen any direct statements from the DoJ, or the CFTC to confirm this.
Saludos.. oye esta publicación es muy interesante. gracias por publicar. pero cree que es posible alguna modificación de precios o es pura especulación?
Gracias. La manipulación de precios ha sido un problema real en el mercado de criptomonedas desde hace algún tiempo y ha empeorado desde la introducción de los contratos de futuros de Bitcoin en diciembre pasado, ya que los operadores reducen el precio spot de Bitcoin para cumplir con el precio de los contratos de futuros que han tomado. . Para resolver este problema, es esencial una investigación sobre el comercio de spoofing y lavado y un marco regulatorio de la SEC (Estados Unidos).
Your post had been curated by the @buildawhale team and mentioned here:
https://steemit.com/curation/@buildawhale/buildawhale-curation-digest-06-04-18
Our curators loved your content. Please continue to post original and beneficial content to keep our platform amazing. They like to get their hands into everything. But the state of the market as it is now is run by pump and dump groups and this just isn't sustainable.