The United States Justice Department has opened a criminal probe into whether traders are responsible for price manipulation of Bitcoin and other digital currencies. The probe comes after another couple of days of severe losses in the crypto market resulting in over $40 Billion Dollars of losses of Total Market Capital. According to the Justice Department, the red-hot markets are rife with misconduct, with four separate sources familiar with the matter.
The investigation will concentrate on illegal practices which supposedly influence prices of digital assets. These practices include spoofing or flooding the market with fake orders to trick other traders into buying or selling. According to the sources, who have asked not to be identified due to the review being private. Federal prosecutors are working with the Commodity Futures Trading Commission, a financial regulator that oversees derivatives tied to Bitcoin.
Authorities are concerned with the fact that virtual currencies are susceptible to fraud for numerous reasons. These concerns have already resulted in China to ban all cryptocurrency exchanges. Other nations, on the other hand, have chosen to start finding ways of regulating digital assets like Philipines and Malta.
More information can be found by visiting the Bloomberg website which is the source of this article.