Probe into Bitcoin price manipulation is ‘A Good Thing’, Novogratz says
Cryptocurrency’s biggest advocate and promoter remains unaffected by the news the Department of Justice has started a criminal probe into potential trading manipulation.
Billionaire investor Mike Novogratz said that he is not shocked by the proclamation and is open to investigation. Michael Edward “Mike” Novogra is an ex-hedge fund manager, formerly of the investment firm Fortress Investment Group. He was ranked a billionaire by Forbes in 2007 and 2008.
Prior to joining Fortress, he was a partner at Goldman Sachs where he spent lots of time working abroad including leadership roles in Asia and Latin America.
Cameron Winklevoss, president of crypto exchange Gemini is feeling positive and praised the act as the beginning of much required regulatory oversight. “Weeding out the bad actors is a good thing, not a bad thing for the health of the market,” Novogratz, is about to set up cryptocurrency merchant bank Galaxy Digital LP, revealed it to sources in a telephonic interview, “Plenty of exchanges have these inflated volume numbers to create some sense of excitement around coins,” he stated his own experience when he was trying to trade. “We welcome any inquiry that serves to foster rules-based marketplaces and deter bad actors,” Winklevoss, president of the Gemini exchange, said to sources.
Tom Lee, of Fundstrat Global Advisors, said in an email, “This is really welcome news ultimately because this means there is adult supervision coming/here.”
Bcfocus first reported earlier on Thursday that a criminal probe was initiated a criminal probe into potential manipulation of Bitcoin and other cryptocurrencies, quoting four people familiar with the matter. The investigation proceeds in such a way to analyze and find whether reported trading volumes across exchanges are accurate, on whether traders use illegal practices to move prices in their favor and on other market irregularities.
Already because of the speculations and regulations in the market for cryptocurrency made the bitcoin price to fell down. Now after the news was published the rate even went down as 4.3 percent to $7,267.
Spencer Bogart of cryptocurrency hedge fund Blockchain Capital said he wouldn’t be surprised if regulators found cases of fraud, given even the most highly scrutinized markets haven’t been immune to it.
“I don’t have any first-hand evidence of manipulation of Bitcoin prices but given that even the most highly regulated and most liquid markets in the world (e.g. Libor, FX markets, commodities) have consistently proven to be manipulated, it wouldn’t be a huge surprise,” Bogart stated.
Themis Trading LLC partner and co-head of equity trading Joseph Saluzzi said there should be cross-market surveillance in crypto markets to stop these practices.
Saluzzi said to sources in an email “The issue is that there is no one regulator monitoring the underlying exchanges and therefore there is no way to know if manipulation like spoofing is going on, “Some exchanges will say that they have information sharing agreements with each other, but again this is not enough to ensure that manipulation is not occurring. As we have seen in the equity market, exchanges are for-profit and cannot be trusted to police themselves.”
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