US DoJ is on a quest for the illegal crypto traders
The US Department of Justice is all set to investigate into illicit activities like spoofing and wash trading prevalent in the nation. US focuses on the identification of the manipulation of prices including bitcoins and altcoins.
In the recent times, as reported by BCFocus, the US DoJ has taken an initiative to probe the manipulation of cryptocurrency prices. Federal prosecutors and Commodity Futures Trading Commission (CFTC) work in close quarters to conduct the identification of these illicit practices. With the progress of time, the concern pertaining to the fraudulent cases of cryptocurrencies is surging.
As per the authorities’ perception, the traders lack faith in the crypto exchanges to chase after those involved in the fraudulent acts. Consequently, the number of reports and complaints against such illicit deeds are very few.
It is not yet known probing of which cryptocurrencies are conducted. However, anonymous sources gave a confirmation about bitcoins and ethereum and that, the probe is in its initial stage. Both the authorities responsible to carry out the investigation have refused to comment to the media sources.
According to sources, with the advent of trading deceitful activities like spoofing continue to persist in US. These acts are aptly encountered by the authorities of US. “Pack Mentality” is exemplified by these fraudsters who trick others as well into buying and selling. These spoofers do not fill their orders and instead, they wait for cancellation and generate profit.
It is, indeed, an easy act for the fraudsters to conduct crypto trading. John Griffin, the professor of finance at Texas University has opined on this issue. He stated that deficit of monitoring practices leads to rise in price manipulation by the spoofers. As per sources, Nasdaq Inc. was hired by Winklevoss Twins to conduct proper monitoring of cryptocurrencies on Gemini, their trading platform.
Last year, the hacking activity of a fraudster group called “Spoofy” was reported. Spoofy was accused of placing an order of $1 million without any execution.
With the enactment of 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, spoofing has been categorised under criminal activity. The act illegalised the setting of orders without filling them in trading market.
Along with this, the authorities intend to investigate in a similar fraudulent act called wash trading. In this trading, deceitful traders orchestrate a confusion in the market with fake buying and selling of orders.
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