(Natural News) Are certain malicious entities committing mass fraud in order to manipulate the price of Bitcoin and other cryptocurrencies? That's what the United States Department of Justice (DoJ) is currently looking into as part of a new criminal probe into crypto crimes.
The investigation comes on the heels of complaints by crypto critics that crypto markets are being scammed by savvy traders who know how to "spoof" the trading platforms and flood them with fake buy and sell orders. Such crimes can drive the price of a crypto way up, or cause it to plunge way down, apart from natural market forces.
It isn't exactly a good thing for the reputation of cryptocurrency in general, which requires honesty, transparency, and accountability if people are going to trust using it. That the crypto world is essentially rife with misconduct at this current juncture is precisely why the DoJ is now getting involved, along with the help of the Commodity Futures Trading Commission (CFTC), which oversees derivatives specifically tied to Bitcoin.
While crypto exchanges are expected to go after these bad players themselves, this obviously doesn't always happen – hence the DoJ involvement. And with all of the crazy price swings with Bitcoin over the past year, many say there isn't a better time than now for regulators to start cracking down and cleaning up the crypto world.
What the DoJ is specifically focused on are spoofing and wash trading, two forms of cheating that regulators have been working for years to eradicate from both the futures and equities markets. Spoofers essentially submit a spate of orders that they then cancel after prices have moved in the desired direction. Wash traders basically trade with themselves, which creates an illusion of artificial market demand, again in order to manipulate prices.
These criminal elements within the crypto trading world likely explain why Bitcoin rose from around $1,000 in early 2017 to almost $20,000 by the year's end. As of this writing, the price of Bitcoin is hovering right around $7,500.