US Launches Criminal Probe Into Bitcoin Price Manipulation (bloomberg.com) 48
The Justice Department has opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies, dramatically ratcheting up U.S. scrutiny of red-hot markets that critics say are rife with misconduct, Bloomberg reported Thursday, citing people familiar with the matter. From the report: The investigation is focused on illegal practices that can influence prices -- such as spoofing, or flooding the market with fake orders to trick other traders into buying or selling, said the people, who asked not to be identified because the review is private. Federal prosecutors are working with the Commodity Futures Trading Commission, a financial regulator that oversees derivatives tied to Bitcoin, the people said. Authorities worry that virtual currencies are susceptible to fraud for multiple reasons: skepticism that all exchanges are actively pursuing cheaters, wild price swings that could make it easy to push valuations around and a lack of regulations like the ones that govern stocks and other assets.
Tether? (Score:2)
Where is the criminal fraud investigation into Tether?
Re: (Score:2)
Chill out - as soon as Goldman's stablecoin is available on the exchanges they'll execute the Tether team, but you need to have patience. Until then Tether is useful to the politically-connected.
All cryptocurrencies and ICOs are scams (Score:1)
Are (any) fiat-currency and (any) cryptocurrency really equivalent, as cryptocurrency fans claim?
For example, US Dollar and Bitcoin are really equals?
Value/validity/authorization of US dollar is provided/guaranteed by US Government (and in-turn whole US Public)!
Also, not to mention, US Dollars in any US Bank is insured by US Government!
What authorization/guarantee/insurance is behind Bitcoin? Nothing!
Sorry but that is the end of discussion then!
Why do you think Satoshi Nakamoto is really hiding his identity
Re: (Score:2)
Nah, they don't know economics, just fealty to arbitrary authority. Nobody cares what they think, inside the crypto community or in DC.
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Well, that fits perfectly. The criminal probe is not a real criminal probe, but a fake and scam criminal probe.
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A bunch of bureaucrats will get paid USD and if they're lucky they will expand their legal power.
Everything done in DC is a jobs program for DC and growing that program is job one. If you understand this, almost everything else makes sense. If you think it's to benefit the citizenry, like 7th-grade social studies teachers profess, then almost everything is baffling.
Nothing new (Score:2, Insightful)
The investigation is focused on illegal practices that can influence prices -- such as spoofing, or flooding the market with fake orders to trick other traders into buying or selling...
So, just like the stock market.
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Yeah, exactly as in the stock market that have rules and enforcement of those rules to reduce illegal practices that can influence prices. Exactly.
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Stocks haven't been "pieces of companies" for an awful long time now.
What company is worth 100 years of its profits? None, in theory, but Wall street is littered with them.
US officially recognises Bitcoin? (Score:2)
Does this mean the US government is officially recognizing Bitcoin as a currency? A stock?
Or would is anything where there is "flooding the market with fake orders to trick other traders into buying/selling" a crime?
If someone did this with kids trading cards, or something like Pokeman, or Magic the Gathering cards- would that also incite an investigation with the government? Or- is it significant that they are investigating this as it means they now "Recognise" bitcoin?
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They are pushing it through the commodities commission, so no, not a currency.
Plus they're happy for the capital gains taxes as people sell it for cash.
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Does this mean the US government is officially recognizing Bitcoin as a currency? A stock?
Or would is anything where there is "flooding the market with fake orders to trick other traders into buying/selling" a crime?
If someone did this with kids trading cards, or something like Pokeman, or Magic the Gathering cards- would that also incite an investigation with the government? Or- is it significant that they are investigating this as it means they now "Recognise" bitcoin?
If someone sought to use them as the basis of a form of currency, using the mere fact that they are limited in number to "collateralize" accounts worth hundreds of billions of dollars, and were used to as a tool to transfer large sums of money internationally, and also led to numerous fraud schemes stealing billions in aggregate - then you bet they would. It is simply recognizing what is actually being done.
Unregulated market trading has always attracted inventive new schemes to make money out of nothing. T
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If the market for Pokeman (whatever that is) involved illegal market manipulation then yes, it would be investigated. Don't mistake something being so obscure or small scale that it isn't worth going after with that not being illegal. If I scam someone on $1 then I have committed a crime but it isn't likely the scammed person/group would bother to report it , and it isn't likely to be prioritized over other investigations if it is reported.
Investigating price manipulation of fake currency (Score:1, Troll)
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At least the GTA cops would be unable to shoot real black boys. Sounds like a good idea.
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If it led to people actually dying in real life you bet they would.
Cryptocurrency frauds and thefts have actually taken billions of dollars from people's pockets.
A valid comparison to Grand Theft Auto would be the schemes for accumulating and manipulating currencies that only exist in videogames and are not convertible at all the real money.
A good comparison is the Linden Dollar in Second Life. No one regulates the Linden Dollar - but the Linden Dollar does not leave the game, and is not convertible to hard
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No one regulates the Linden Dollar - but the Linden Dollar does not leave the game, and is not convertible to hard currency.
Don't be so sure [wikipedia.org].
Wild Wild West (Score:2, Insightful)
Straight outta the pennystock playbooks before the SEC finally brought the hammer out.
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What hammer? Penny stocks are still a real thing scamming thousands every day. Ironically the biggest hit to the OTC market has been crypto gambling. Younger generations are losing their money there instead of penny stocks.
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The SEC banned a lot of the most egregious of practices (for example, filling up the order books with fake buy/sells). Check out the book Momo Trading. One of the traders interviewed explains the practice and how most of his strategies are no longer allowed on the stock exchange. It's very clear that his strategies (and probably he himself) are just doing it in crypto these days since there's absolutely no regulation.
What about Federal Reserve? (Score:1)
How about a criminal probe into The Fed?
I’m confused (Score:1)
This was inevitable (Score:3)
This was the inevitable outcome of permitting electronic currency trading on the investment market. These guys are idiots for even allowing this trading to happen!
The users of any electronic currency want a currency to be stable so that it gets wide adoption and every one can be comfortable with using and saving it for retirement, etc.
The market investors want the currency to be unstable. If the currency was stable nobody could fleece any money out of all the other traders, so the investment market desires the currency to be unstable.
The problem is the currency only has a subjective value based upon what other people think it is worth, and that value is always going to be undermined by the investment market where big chunks of currency can be gamed to force market swings, which is exactly what the users do not want!!!
Re: This was inevitable (Score:1)
Thank you for voluntarily proving the point made here, though that is not exactly what you thought you were doing at the time.