DOJ Price Manipulation Probe Haunts Bitcoin (BTC) Price Movement

0
72
Bitcoin (BTC)

Bitcoin (BTC) is under pressure amidst claims over possible price manipulation. The crypto shed nearly 4% in market value after it emerged that the U.S Justice Department has lodged investigations over potential price manipulation targeting several cryptocurrencies.

DOJ Cryptocurrencies Probe

The investigations focus on illegal practices that can influence prices. Some of the practices that the DOJ is maintaining a close watch on include flooding of the market with fake orders in a bid to trick traders into buying and selling.

The regulator is also maintaining an eye on Wash trades, whereby a large trader trades against himself to give a false impression of market demand in a bid to lure more people. Federal prosecutors have reportedly teamed up with the Commodity Futures Trading Commission as part of the probe.

Claims of bitcoin price manipulation do not come as a surprise given that there are large holders of the cryptocurrency who wield too much power to dictate price movements. In the stock market, anyone holding a significant proportion of outstanding security is usually subject to additional rules and scrutiny. A lack of regulation and scrutiny means large bitcoin holders can manipulate price movements to their advantage.

Miners are another clique of holders that are believed to be in a position to manipulate bitcoin prices. Miners earn bitcoin for mining thus would always be happy with higher prices as the same goes a long way in rewarding their operations.

Regulators Concern

Authorities have already started to sound the warning bells on becoming clear that virtual currencies are susceptible to fraud. Fueling the sentiments is growing skepticism that crypto exchanges are actively pursuing cheaters. A lack of regulations like the ones governing the stock markets also continues to affirm the price manipulation suggestions.

Growing fraud concerns and price manipulation has seen a number of countries ban cryptocurrencies related activities. China and India have already instituted such bans as Japan, South Korea and the Philippines maintain a tight grip on the regulation front.

The result has been a slump in the price of bitcoin in recent weeks. After bouncing back and rallying to the $9,500, the popular cryptocurrency has shed more than 10% in market value on plummeting to the $7,300 handle.

Disclaimer: Nothing in this article should be construed as financial advice in any way, nor as an encouragement to engage in cryptocurrency trading activity. This article was not sponsored by any entities or companies mentioned in the article. The only purpose of this article is to inform/educate on the topics discussed in the article.

Dippli is an independent media outlet that covers the current events in the crypto space. Got breaking news or a story to share? Then feel free to contact us at news@dippli.com.

LEAVE A REPLY

Please enter your comment!
Please enter your name here