Economy

CFTC Reportedly Joins the Investigation Against Bitcoin Price Manipulation

CFTC Reportedly Joins the Investigation Against Bitcoin Price Manipulation”

"Perhaps more impactful is the news that USA government investigators have ordered four major cryptocurrency exchanges - including Coinbase and Kraken - to hand over comprehensive information regarding trading in order to aid in its investigation over potential price manipulation", Crypto Experts wrote on Twitter.

CME's BTC futures contracts get their prices from four different cryptocurrency exchanges: Bitstamp, ItBit, Kraken, and Coinbase.

According to aWSJ news report, the US Commodity Futures Trading Commission (CFTC) will collaborate with the Justice Department which launched a probe in May to probe spot BTC markets for refusing to share trading data with the CME.

CME spokeswoman, Laurie Bischel, stated: "All participating exchanges are required to share information, including cooperation with inquiries and investigations". The exchanges refused, saying that the request was "invasive", and CME changed the request to cover only a few hours' worth of data. The exchanges did not wish to provide the data to the London-based company, a company that has its own cryptocurrency trading platform. Such an agreement would have detailed the type of trading information the CME would have received, including traders' identities, the time of trades, canceled or unfilled orders and size of orders. The index data provider has agreements with exchanges to share price data.

According to Wall Street Journal CME had asked for the information through a third party which calculates the Bitcoin price for use in the futures.

The CFTC was moved by the dispute over sharing the trading data to investigate whether or not there was collusion to manipulate the prices, the sources said.

It has been believed by the agency that manipulation in exchanges can distort the prices in the government regulated markets. The US regulator is demanding extensive trading data concurrent with the launch of Bitcoin futures. People who know the matter well told the Journal that CFTC was carrying the investigation together with the US Department of Justice.

Bitstamp chose not to comment on the investigation, and Coinbase did not respond to a request for comment. He stated earlier this week that bitcoin market manipulation concerns were overstated, and that anyone attempting to manipulate the market is taking a big risk for minimum benefit.

Jesse Powell, Kraken's chief executive, released a statement Friday claiming that the CFTC's "newly declared oversight" is causing the exchanges to question their index participation.

The largest cryptocurrency Bitcoin (BTC) was the least affected losing just a little less than 5% in the past 24 hours and was trading at $7,244.

Four major bitcoin exchanges have been ordered to turn over comprehensive trading information to USA government investigators, following fears of bitcoin futures-driven market manipulation.



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