Jamie Dimon Accused of Market Abuse regarding Comments on Bitcoin

Rick D. | September 22, 2017 | 4:00 pm
market, bitcoin

Jamie Dimon Accused of Market Abuse regarding Comments on Bitcoin

Rick D. | September 22, 2017 | 4:00 pm

In response to Jamie Dimon’s misguided comments about Bitcoin last week, one firm has filed a market abuse report against him. Blockswater, an algorithmic liquidity provider, raised issues of market manipulation, as well as accusing Dimon of deliberately distorting the public perception of cryptocurrency.

According to London-based Blockswater, the JP Morgan CEO violated Article 12 of the European Union’s Market Abuse Regulation when he denounced the cryptocurrency as a “fraud” and said that any employee trading in digital assets would be fired for being “stupid”. They allege that Dimon “knew, or ought to have known, that the information he disseminated was false and misleading” and that his statement negatively impacted the reputation and price of Bitcoin. Blockswater’s managing partner, Florian Schweitzer said:

Jamie Dimon’s public assertions did not only affect the reputation of Bitcoin, they harmed the interests of some of his own clients and many young businesses that are working hard to create a better financial system.

Shortly following Dimon’s outburst at cryptocurrency, it emerged that JP Morgan was one of the most active buyers of a Bitcoin tracker fund called Bitcoin XBT. Finance blog Zero Hedge picked up on this and accused JP Morgan of manipulating the market to pick up Bitcoin cheaply for themselves or helping clients to do so. However, a spokesperson for the company responded to allegations with the following: “They are not JP Morgan order. These are clients purchasing third-party products directly.”

Although the crime of market abuse is punishable by up to two years in jail, the Swedish Financial Supervisory Authority did not confirm whether or not they’re looking into the matter yet. JP Morgan has refused to provide comment thus far.

It looks like Jamie Dimon should have followed the advice offered on Twitter by former JP Morgan executive, Alex Gurevich in response to the comments he made regarding cryptocurrency:

It is yet to be seen how the complaint will pan out and whether they are going to be any inquiries into the matter or not.

Ref: QZ
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