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Criminal investigation into Bitcoin price manipulation launched by Justice Department

By Greg S ยท 18 replies
May 24, 2018
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  1. The United States Justice Department has recently opened an investigation to determine whether traders of Bitcoin are intentionally influencing the price of the digital currency. Investigators will examine practices such as flooding the market with mass numbers of buy and sell orders with intent to retract the offers later.

    Federal prosecutors will be working with the Commodity Futures Trading Commission. Regulators remain concerned that cryptocurrencies pose a high risk to consumers with their highly volatile nature. Additionally, lack of consumer knowledge presents a great risk of fraud with little or no recourse available.

    Another tactic being scrutinized is wash trading. There are some users that place buy and sell orders to make it appear as though there is high market activity, but are truly only moving their own assets around through an exchange site. Once there appears to be high activity periods, other consumers are lured into making trades and allowing the wash trader to take advantage of the market volatility.

    Both Bitcoin and Ethereum are being examined for evidence of wash trading and order spoofing. Since the CFTC is a derivatives oversight group, it does not actually regulate the direct trading of digital coins. Instead, it watches over futures that are linked to cryptocurrencies. If there are any instances of illicit activity found with respect to spot markets, sanctions can be imposed.

    Despite attempts to regulate and patrol the sea of cryptocurrencies, there is little that can actually be done to prevent order spoofing and market manipulation techniques. Digital currencies can be traded globally at any time without need for a central authority. It is possible to directly regulate derivatives markets, but as long as the underlying cryptocurrencies used in spot markets are being used, there is little that can be done to enforce trade rules.

    Permalink to story.

  2. VitalyT

    VitalyT Russ-Puss Posts: 4,533   +3,123

    The entire cryptomarket is built on pure speculation and price manipulation, which is only natural, since crypto-currencies have no real value of their own, I.e. they do not represent any real business asset or commodity.

    So what do they expect to find in this "investigation"? LOL. Maybe they are just looking for something new to put a blame on Russia or North Korea?

    The only thing that's criminal here is how short-sighted the justice department is.
  3. Jeff Re

    Jeff Re TS Addict Posts: 160   +125

    How is this different than the U.S. dollar?
    Hexic likes this.
  4. VitalyT

    VitalyT Russ-Puss Posts: 4,533   +3,123

    Every real currency is supposed to represent the overall produced national value, plus the worth of land and real estate. But that's all in theory. In reality, an over-printed currency degrades its value, and the US is probably the worst example of them all, with the currency over-printed many times over what it is supposed to be, which yet survives because it is used in so many countries.

    But still, the original idea is there, to represent the overall national value of everything owned by the country. While a crypto-currency by definition represents nothing.
  5. Evernessince

    Evernessince TS Evangelist Posts: 4,095   +3,647

    Fiat currency is backed by something, digital currency is not.
  6. H3llion

    H3llion TechSpot Paladin Posts: 1,702   +440

    You could not be more far off the tree even if you tried, maybe on another plane of existence. While yeh its manipulated so hard its bonkers its basically stocks and shares in peoples ventures that may "change the world".

    It's like Kickstarter but you can make money yourself as the consumer if you are smart. Investing in potential technologies that may kick off. Oh and trust me outside of the shitty coins which are basically payment currencies you have things like decentralized oracles, smart contracts and so on...

    You could say, well its really the blockchain tech than the shitty "ponzie" crypto, and you would be correct but big part of is being decentralized. Anyone can make a blockchain app with some knowledge, but to grow it globally with transparency is a whole other ball game and that is where belief by us techies and the "get rich quick" chasers help it grow. We are part of it and drive it forward.
    Last edited: May 24, 2018
  7. H3llion

    H3llion TechSpot Paladin Posts: 1,702   +440

    Digital Currency is backed by few things, still too volatile but that will balance out eventually.

    - Fiat and peoples assets, reason why its volatile (among price manipulation by whales).
    - Technology behind the different cryptos
    - Masses of people who are investing in it, which really funnels down to the above two points
    - Belief (lol what a shitty reason) but as history has shown us, belief is a strong tool.
  8. Dimitrios

    Dimitrios TS Guru Posts: 505   +384

    Unless I can use it to pay my bills or buy anything I want, it's just fake monopoly money.
  9. Dimitrios

    Dimitrios TS Guru Posts: 505   +384

    With American money you can use it to pay your bills and buy goods and it's backed by gold.
  10. HyPeroxya

    HyPeroxya TS Enthusiast Posts: 87   +10

    The gold standard finished in 1972 ? by r nixon . whilst I don't trust any crypto I did notice azn minting their own mini experiment , and when they start to dip thier toes in the water, even whales start to blow harder ?
  11. Evernessince

    Evernessince TS Evangelist Posts: 4,095   +3,647

    Yes all those people invest in the crypto but they don't back it. They won't guarantee the system won't crash overnight and there's no money back if bitcoin evaporates overnight. In order to back it, they would each have to contribute something of value as a basis for the currency so that it's impossible for people to loose their entire fortune without recompense.
  12. Potato Judge

    Potato Judge TS Booster Posts: 161   +73

    Someone from the justice dept. probably lost a huge amount of investment in crypto currency.
  13. H3llion

    H3llion TechSpot Paladin Posts: 1,702   +440

    You shares in a company can get anally ****ed too. Also crypto is bigger than just Bitcoin (ironically).
  14. H3llion

    H3llion TechSpot Paladin Posts: 1,702   +440

    Can pretty much do this already.
  15. Jroc187

    Jroc187 TS Enthusiast Posts: 33   +15

    Some good crypto investing advice right here

    Dimitrios and Evernessince like this.
  16. Jeff Re

    Jeff Re TS Addict Posts: 160   +125

    Here is the definition: Fiat money is a currency without intrinsic value that has been established as money, often by government regulation. Fiat money does not have use value, and has value only because a government maintains its value, or because parties engaging in exchange agree on its value.

    There have been countless books written on the subject of gold backing the U.S. dollar. I'll let you read them.
  17. Evernessince

    Evernessince TS Evangelist Posts: 4,095   +3,647

    Shares are not fiat currency though.
  18. Dimitrios

    Dimitrios TS Guru Posts: 505   +384

    I can't stand that guy but that was actually a good video. Thanks for posting that.
  19. H3llion

    H3llion TechSpot Paladin Posts: 1,702   +440

    You purchase shares with fiat.
    You purchase crypto with fiat.
    Shares do not always give you the right to vote on the matters of the company, same goes for crypto (all of crypto in this case).
    If shares go down, so does your original fiat investment.
    If crypto goes down, same happens.

    You are basically investing in "promising" white-papers which you help the teams with your fiat on achieving those goals. If all goes well, company gets a better value/position within crypto and you profit.

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