Throughout its existence, Bitcoin has experienced a lot of hurdles and known numerous obstacles. From steep bear trends to regulatory restrictions, the first ever decentralized virtual currency has seen it all. In addition, each week that passes, Bitcoin is the target of negative headlines, skeptical remarks, criticisms and harsh regulation attempts. This is the case for other cryptocurrencies as well. The digital assets are constantly under the scrutiny of the media and lawmakers around the globe. Satoshi Nakamoto’s coin, Ether, and possibly other tokens are now making the headlines once again as the U.S. Department of Justice has opened an investigation regarding potential price manipulation.
As Bitcoin is currently experiencing a complicated start to the year, the U.S. DoJ’s investigation represents another blow for the crypto space. The organization’s investigation is specifically targeting traders that have been meddling with the markets and influenced the price of the virtual currencies. According to a Bloomberg report, the Justice Department is looking into various illegal techniques that could have been used by traders on cryptocurrency exchanges and trading platforms. The first common practice is called spoofing, which is when a trader makes a lot of orders at once to affect the price movement of the asset. After the price moves in a certain desired direction, the trader then cancels the orders. The investigation is being conducted with the help of the CFTC, which recently launched Bitcoin futures trading. The launch of futures may have increased the amount of price manipulation and cheating. Another tactic that the DoJ is analyzing is called wash trading, which occurs when individuals trade with themselves, back and forth, to simulate market activity and attract other traders.
This is an important move from the Justice Department, as it has a lot of implications for the future, depending on the findings and results of the investigation. Will it push other countries and other governments to act more severely when it comes to cryptocurrency regulation? Time will tell.
TLDR: The U.S. Department of Justice is investigating potential price manipulation for multiple cryptocurrencies, including Bitcoin and Ethereum. The investigators are looking into various illegal trading techniques.