US Department of Justice has recently opened a case against cryptocurrency manipulation. The matter looks much serious than some earlier attempts.
According to a Bloomberg report, the United States Department of justice is building up a case against crypto traders. These are allegedly involved in the manipulation of Bitcoin (BTC) and Ethereum (ETH) prices.
Bloomberg report goes into its unnamed sources one by one however it never directly reveals a name. There are criminal investigations that are being already run by some other US federal agencies.
These include US Federal Prosecution and the United States Community Futures Trading Commission also known as CFTC.
CFTC is specifically looking into the illegal practices such as spooning and wash trading are utilized by crypto traders in order to inflate the value of cryptocurrencies. The commission is especially looking into the prices of Bitcoin and Ethereum.
In recent days, an online entity called Spoofy has utilized both of these techniques to create false demand.
In Spooning, the buyer places a very large order of a specific coin. Let’s say $ 5 million and creates an artificial surge in the value of the coin. Then the buyer doesn’t follow through.
And in the meantime, while prices were high he sold his previously held coins on inflated value.
In Wash trading, traders buy their own orders. But in the process, an illusion is created that the prices of the coins are going high.
This, in turn, attracts more and more buyers which creates bubble-like conditions.
It has to be noted that US Securities and Exchange Commission (SEC) has already launched its own investigations into the cryptocurrencies.
Also looks like both American and Canadians are teaming up. They have launched a similar operation to eradicate the fraud and con presence in the crypto market.
The joint presence will be a powerful force to deal with.
Disclaimer: Koinalert’s content is only for information purpose in nature and should not be considered as investment advice. Do your own market research before investing in any cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.