US Department of Justice investigating cryptocurrency for Price Fixing
US Department of Justice investigating cryptocurrency for Price Measures?
According Engadget the US Department of Justice is teaming up to look into various price fixing actions being taken in the cryptocurrency space that have the result of artificially setting a price of an asset.
In particular the DOJ is looking into the practices of Spoofing and Wash Trading.
According to Wikipedia Spoofing is:
Spoofing is a disruptive algorithmic trading entity employed by traders to outpace other market participants and to manipulate commodity markets. ... Under the 2010 Dodd-Frank Act spoofing is defined as "the illegal practice of bidding or offering with intent to cancel before execution."
According to Wikipedia Wash Trading is:
A wash trade is a form of market manipulation in which an investor simultaneously sells and buys the same financial instruments to create misleading, artificial activity in the marketplace. First, an investor will place a sell order.
Both practices have long been monitored in other financial mediums but the regulators are just beginning to catch up with the cryptocurrency market. The goal of the private probe will be to find traders doing these practices to fix the price of the currencies.
The DOJ is teaming up with the Commodity Futures Trading Commission in the Investigation.
They crypto market may temporarily experience lower prices due to increase regulator presence. However, on the longterm the elmination of fraudulent practices could lead increased asset flows from mainstream investors who are shying way from the market due to its wild west atmosphere.
This Post was Written by Kid Crypto!
Kid Crypto is a crypto researcher out of Denver Colorado. His opinions are his own and not that of Darkstreet.
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