Since Bitcoin’s price Explosion in the past year, the currency of price manipulation. Institutional investors (also known as “whales” in cryptographic Lingo) can change the price depending on your needs.
As a result, smaller investors are at the mercy of the whales were often victims of such market manipulations.
This will change, however.
The justice Department is investigating possible price manipulation
The Ministry of justice of the United States has recently initiated a criminal investigation, to investigate traders who manipulate currencies, the price of Bitcoin and other Crypto. The market, in which there is already a devastating fraud cases will now be examined for the Virus that plagues the traditional stock market price manipulation.
According to a Bloomberg report, this investigation aims to market manipulation tactics that are considered illegal, such as, for example, Spoofing or Flooding of the market with bogus trade orders to change the market mood, and to entice people to purchase or sale of your Tokens. This investigation is carried out in cooperation with the Commodity Futures Trading Commission (CFTC), which had previously expressed the intention against fraudulent ICOs to proceed, the integrity of the crypto-currency market.
The wild price fluctuations, has shown Bitcoin in the last time, have aroused the suspicion of fraud, as the authorities believe that the speculative nature of crypto-currencies by a lack of regulations such as, for example, in the stock market can be fueled.
Some of the more severe tactics that have tried the Ministry of justice to eradicate, includes Spoofing, and Wash Trading maneuvers, for which the authorities spent years trying to identify you on the Futures market, and stock market and to stop. Spoofing involves large investors, the stacking of a series of massive buy / sell orders in a certain direction and you can quickly remove, as soon as the price moves in that direction. On the other hand, Wash Trading is the act of trading with itself in the attempt to market activities to “fake” to entice other investors to Immerse themselves in a supposedly active market.
According to John Griffin, a Finance Professor from the University of Texas, is the relative Immaturity of the crypto-currency market, as well as the lack of regulation one of the key factors for the dissemination of market manipulation tactics.
“There is very little Monitoring of manipulative trading, Spoofing, and Wash Trading,” said Griffin. To spoof “this market would be easy.”