CFTC Demands Data from Exchanges Related to Bitcoin Price Manipulation Investigation

JP Buntinx | June 9, 2018 | 11:00 pm

CFTC Demands Data from Exchanges Related to Bitcoin Price Manipulation Investigation

JP Buntinx | June 9, 2018 | 11:00 pm

The Bitcoin price is volatile by nature. Not all of this volatility is created out of the blue either. An ongoing investigation regarding Bitcoin price manipulation is taking place. As such, U.S. regulators demand data from various trading platforms to address these concerns.

Bitcoin Price Manipulation Investigation

There have been swelling rumors regarding major Bitcoin price manipulation taking place. While such a development wouldn’t surprise a lot of people, proving nefarious activity is easier said than done. In this particular case, the manipulation is linked to the launch of Bitcoin futures. The Chicago Mercantile Exchange (CME) Group introduced such vehicles several months ago.

While Bitcoin futures are not spectacularly popular, they do play an integral role in the market. These CME products derive the Bitcoin price from four key exchanges. The list includes Coinbase, Kraken, Bitstamp, and itBit. If any of these platforms is subject to manipulation, it will also influence the futures spot price.

As such, CME is investigating the manipulation rumors. All four exchanges have been asked to share trading data after the settlement of the first futures contract. Unfortunately, it appears several companies have refused to cooperate in this regard. That doesn’t necessarily bode well in this regard.

CFTC Officials Grow Frustrated

This ongoing debacle has irked some U.S. Commodity Futures Trading Commission (CFTC) regulators. This entity is responsible for regulating CME and all of its activities. Yet, not having access to all of the necessary information poses a big problem, which cannot be solved immediately. It even warranted subpoenaing all exchanges for the data in question. Going through such motions shows this investigation is being taken very seriously.

Additionally, this raises the question as to why CME doesn’t have agreements in place to demand such information. It is a grave oversight which doesn’t please the CFTC in the slightest. Having such agreements in place makes it easier to share trading data and avoids subpoenas accordingly. It remains unclear if this situation will be addressed moving forward.

For the time being, there is no evidence to back up the manipulation claims. However, this data debacle shows there may be more to this situation than meets the eye. The CFTC will continue to coordinate with the U.S. Justice Department regarding this investigation. It also shows there is a growing desire to further legitimize cryptocurrencies as a whole.

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  • wolfystrade

    They never gave a F about gold and silver manipulation

    • AssFirstNews

      I’m going to venture a guess that the reason for that is because very few people were holding on to significant amounts of gold or silver, which meant that not very many average people would ever realize massive profits from the manipulated speculation that took place.

      Most of that money was tied up in the hands of a very small number of speculators and investors who became insanely wealthy when President Nixon removed gold backing from the U.S. Dollar. I personally knew one such gentleman (now long deceased) who instantly made over $100-million from Nixon’s decree in that case. But people like him were extremely rare, and far rarer than even the current number of new multi-millionaires and billionaires that have been created so far by Bitcoin, Ethereum and so forth.

      And the likelihood to create far more newly extremely wealthy people from cryptocurrencies WOULD happen if predictions from industry players like Mike Novogratz end up coming true to put the overall crypto industry market cap at say $20-trillion in the fairly near future, which would presumably put the value of Bitcoin itself at about $400K per coin! If that happens, even I would stand to realize in the low tens-of-millions of dollars myself with just the relatively very modest sum of Bitcoin and other cryptocoins that I’m holding on to.

      You might be another example of this scenario. The point is that there are still considerably more people scattered around like me to view cryptocurrencies than what existed during the 1970’s involving privately held gold and silver wealth.

  • Robert Barnette

    One of these firms should hire Bart Chilton

  • AssFirstNews

    The manipulation that caused the 1929 Great Depression to happen was apparently okay… The manipulation that caused the 1990’s DOTCOM bubble and subsequent collapse was apparently okay… The manipulation that caused the 2008 housing market collapse, bank failures, major cities like Chicago claiming insolvency — AND the stock market collapse was apparently okay… BUT now you’re gonna tell me the CFTC cares what’s going on with “cryptocurrencies” that ARE NOT even regulated like everything else? I don’t believe it. I don’t think the CFTC gives a fat rat’s ass about any of this. Why wasn’t the CFTC investigating for manipulation when Bitcoin hit $20K back in December? After all, the fact of price manipulation practices works BOTH WAYS on the up and down movements of ANY financial instrument, including gold, silver, stocks and real estate. It all sounds like FUD to me. And it might even be FUD that is being promoted by the CFTC itself for whatever reasons, but STILL FUD in any case…

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