Crypto News | Crypto Market Manipulation Under Scrutiny

Crypto market manipulation has always been a hot topic among cryptocurrency enthusiasts. Sudden price shifts and bearish reversal patterns are commonly pinned on Bitcoin whales, such as the ever-present Mt. Gox frozen assets controlled by Nobuaki Kobayashi, the Tokyo-based trustee of the defunct exchange. Some of these fears are justified, since even just moving a large amount of BTC tokens formerly owned by Mt. Gox to a different address can push traders to sell, causing a sharp price decline. Similarly, Tether and Bitfinex are often accused of price manipulation, with Tether doing very little to clear its name and conclusively prove that all of the USDT tokens are indeed full backed. However, unsubstantiated accusations can hurt businesses and replace prudent decision making with conspiracy theories. Be that as it may, those who believe that crypto market manipulation is more common than most people think are having a field day today, after Bloomberg reported that the U.S Department of Justice has launched an investigation into crypto traders who may have used illicit tactics to influence the market. The tactics allegedly used by traders include spoofing – making a large number of fake orders, as well as sending themselves orders to create an illusion of increasing demand. A few weeks ago, CFTC commissioner Brian Quintenz said that the agency will be paying close attention on fraud and price manipulation when it comes to cryptocurrencies.

In California, there is an ongoing debate between two Democratic Congressional nominees on whether Bitcoin and other cryptocurrencies should be allowed in politics. While Brian Forde is openly pro-crypto, being promoted by the media as one of the first politicians to accept crypto payments, Dave Min, his rival and a former SEC attorney, claimed in a TV ad that Forde’s big donors are crypto speculators who are against cracking down on human trafficking and drugs. Unsurprisingly, Forde is currently favored by crypto enthusiasts, having reportedly raised $130,000 in various cryptocurrencies. Dave Min, on the other hand, came under fire for making sensationalistic, unsubstantiated claims. Later on, his campaign manager backpedaled somewhat, saying that Dave Min is also a firm “believer in the potential of distributed ledger technology”, although he is more concerned about the “deregulatory agenda” being pushed lately.

In spite of all this, it is likely that the fate of blockchain technology won’t be decided by politicians and regulators, but by industry leaders willing to implement it and take it to the next level. On May 24, CoinDesk published a lengthy article about blockchain technology and manufacturing. The article was originally written by Maja Vujinovic for CoinDesk’s Consensus 2018 conference. In the article, Vujinovic talks about the challenges manufacturing is facing in the 21st century, such as supply chain management (SCM), outsourcing, sustainability, and corporate social responsibility. Businesses are constantly forced to innovate in order to stay competitive. Her hypothesis is that, while blockchain technology cannot singlehandedly solve these issues, it can certainly make them more manageable through the use of tamper-evident distributed ledgers, automated supply chains, smart contracts, information protection, and full transactional autonomy for machines. The challenge lies in convincing companies to use blockchain technology, however. In our opinion, even if they may seem reluctant at first, the market will force them to do it sooner or later.

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Author: Max Rothstein

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