According to Bloomberg, on the initiative of the US Department of Justice, the US Federal Attorney’s Office and the Commodity Futures Trading Commission (CFTC) launched a criminal investigation into the financial manipulation of the crypto-currency market. Bloomberg does not disclose its sources, but consider their information to be reliable.
According to the published information, the criminal case was launched on May 24, 2018. Investigators will have to find out how traders could influence the pricing on the crypto currency market through illegal activities. The subject of investigation will be the so-called spoofing and wash trading.
Manipulative trading operations in the form of spoofing and wash trading have become known thanks to a group of traders calling themselves “Spoofy”. They placed several orders for a total amount of USD 1 million with an obviously overstated price, which significantly influenced the dynamics of the market. The orders were soon canceled, but the goal of traders was achieved – for a short time the market managed to raise. It is not necessary to specify that after such manipulations, there is a sharp pullback, which forces those, who fell for temporary growth, to go into the red.
Wash trading is another feature of the Spoofy traders. The essence of manipulation is that the trader buys his own orders, thus creating the appearance of good volumes. This affects the pricing of the market.
Today such manipulations are carried out by many groups of traders, which caused US law enforcement and regulatory bodies to intervene in the current situation. According to the information provided by Bloomberg, manipulations with Bitcoin (BTC) and Ethereum (ETH) will be investigated within this criminal case.
It is worth noting that such investigations are no longer a novelty. Back in March, the US Securities and Exchange Commission (SEC) began its investigation into the crypt manipulation. In addition, regulators of the United States and Canada announced a joint project to identify and eliminate fraudulent schemes in the crypto investing.
