The United States’ Justice Department has reportedly opened a criminal investigation into possible market manipulation of prices of cryptocurrencies including bitcoin by traders.
Citing sources familiar with the probe, Bloomberg is reporting that the United States Department of Justice (DOJ) is working alongside the Commodities and Futures Trading Commission (CFTC), the markets regulator, to focus on illegal trading activities in cryptocurrency markets.
Specifically, the investigation is narrowing in on ‘spoofing’, a form of market manipulation wherein traders enter a flurry of false orders to deceive other market participants into buying or selling, as well as “wash trading” – wherein traders sells and buys with themselves to purport heightened market activity in order to stroke confidence among other investors and lure them into the market.