The Justice Department is paying close attention to cryptocurrency prices as well as ICOs. In their latest attempt, they have recently started a criminal probe against the manipulation of Bitcoin prices. Similarly, they are trying to find out more about the price movements in other cryptocurrencies as well. This clearly indicates that the Justice Department is paying close attention to the prices of cryptocurrencies. According to sources, there are many critics as well as individuals who are manipulating the prices with the help of statements as well as news.
In addition to that, the Justice Department is trying to figure out whether any spoofing or flooding the market with fake orders has led to a change in Bitcoin prices or any other cryptocurrency prices. This, in turn, can be considered as price manipulation.
One of the main reasons why Justice Department is so worried is because each and everyone exchange has different mechanisms for regulation. As a result, price swings in 1 exchange can easily impact some of the other lesser-known exchanges. There is no centralized mechanism for controlling the prices of Bitcoin or other cryptocurrencies.
After the investigation was first reported, Bitcoin fell by around 3%. If you look at the peak which was created on May 4, you will realize that it was down by approximately 20%.
Earlier as well, when China was planning to ban the cryptocurrency exchanges or Japan was planning to increase regulations on cryptocurrencies as well as ICOs, Bitcoin fell significantly as well. The Justice Department is also trying to figure out whether it was also due the manipulation or whether it was natural price moment.
Traders punching in fake orders:
According to the Justice Department, there are also chances that traders might be punching in the fake orders. If indeed, that is happening, the fake orders can easily manipulate the prices. Depending on the type of the orders, the prices can increase or decrease. This is the reason why the Justice Department is actively investigating any reports or any improper price movements.
It remains to be seen whether it is able to unearth any wrongdoing or whether the price movements have been completely natural. Only time will be able to tell whether anyone is caught or anyone is punished due to the manipulation of the cryptocurrencies. One thing which is for sure is that Justice Department is leaving no stone unturned to legitimize the cryptocurrency market.
Source:- Bloomberg
