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US Department of Justice is investigating Bitcoin price manipulation

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Bitcoin has always been contentious, especially as prices of the decentralized currency rise and fall at rapid-fire rates. The United States Department of Justice is taking a closer look at that by opening a criminal probe into price manipulation of Bitcoin (and other cryptocurrencies), according to a report from Bloomberg.

According to the report, investigators are specifically looking into practices like spoofing (filling the marketplace with fake orders that are later canceled to manipulate others to buy or sell a particular coin) and wash trading (trading with oneself in order to falsely imply more market demand than there actually is). There are forms of cheating that have long existed and been battled in more traditional financial markets, but cryptocurrency’s lack of serious regulation or monitoring may have given these old scams a new place to thrive.

According to the report, the DOJ is working with Commodity Futures Trading Commission (CFTC), which oversees and regulates cryptocurrency derivatives in its investigation. Part of the problem, however, is that the CFTC can only regulate futures based on coins, not the actual trading of coins themselves. That could change if the investigation finds that fraud is found to have actually occurred.

The new DOJ investigation isn’t the first attempt by the government to try and rein in shady Bitcoin practices, either. The SEC has been struggling for several months to try and better regulate sketchy ICOs (initial coin offerings), even going as far as creating a fake ICO of its own to help warn against the problem. The SEC has also warned celebrities against endorsing ICOs without proper disclosure, and it recently charged a fraudulent ICO endorsed by Floyd Mayweather and DJ Khaled over false claims.

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