DoJ and CFTC Investigating Bitcoin Manipulation via Spoofing

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Updated: May 28, 2018, 08:31 UTC

The Department of Justice in the U.S has opened an investigation into Bitcoin spoofing and the CFTC has joined the inquiry. No specific entities have been named concerning who the Department of Justice may be looking at specifically yet.

DoJ and CFTC Investigating Bitcoin Manipulation via Spoofing

Spoofing is a form of trading manipulation in which a trader usually sends repeated buy or sell orders and cancels them quickly away from the actual market price, to create the impression the market is within the vicinity of the bid/ask price which does not actually exist.

The Dodd-Frank Act of 2010 forbids spoofing. The practice came into vogue as traders found they could transmit orders quickly and cancel them fast, as the speed and power of computers gained.

The investigation being led by the Department of Justice comes on the heels of last week’s announcement via a coordinated effort by U.S agencies called ‘Operation Clean Sweep’ which is actively looking into Initial Coin Offering scams.

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Cryptocurrencies recent broad market slump started shortly after the Consensus summit ended in New York City. The combination of ‘Operation Clean Sweep’ and the developing news that the Department of Justice is investigating spoofing has not help trading sentiment.

Yaron Mazor is a senior analyst at SuperTraderTV.

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About the Author

Yaron Mazorcontributor

Yaron has been involved with the capital markets since 1998. During the past 16 years, Yaron has been a day and swing stocks trader in the American market. Yaron has founded and made successful investments into businesses spanning exciting industries – from apparel to restaurants and bars, to high tech, medical technology, and education.