Manipulation Probe: US Regulator Demands Info From Bitcoin Exchanges

US Regulator Subpoenas Coinbase Kraken Bitstamp & It Bit in Bitcoin Manipulation Probe

US Regulator Subpoenas Coinbase Kraken Bitstamp & It Bit in Bitcoin Manipulation Probe

USA government officials have ordered multiple cryptocurrency exchanges to fork over comprehensive trading data in order to aid in their investigation of whether or not cryptocurrency markets are being manipulated.

The Commodity Futures Trading Commission (CFTC) has launched an investigation into Coinbase, Bitstamp, Kraken as well as ItBit exchanges.

According to the report, the failure irked the CFTC, which supervises CME and gave it the green light in December 2017 to list bitcoin futures.

"All participating exchanges are required to share information, including cooperation with inquiries and investigations".

To understand why CFTC is investigating these major crypto exchanges it is important to know the working of CME and all these exchanges. The exchanges refused, saying that the request was "invasive", and CME changed the request to cover only a few hours' worth of data.

What do you think of the subpoenas send by CFTC to these exchanges for trading data?

The CFTC, which had supported the bitcoin futures' introduction which they saw as risky but worthwhile, became frustrated and subpoenaed the exchanges. Such data would include trade times, canceled or unfilled orders, order sizes and the identities of the traders. The department is said to be looking for ways in which traders can manipulate prices of cryptocurrencies through illegal activities like wash trading. He stated earlier this week that bitcoin market manipulation concerns were overstated, and that anyone attempting to manipulate the market is taking a big risk for minimum benefit.

US Regulator Subpoenas Coinbase Kraken Bitstamp & It Bit in Bitcoin Manipulation Probe

Bitstamp chose not to comment on the investigation, and Coinbase did not respond to a request for comment.

It has been believed by the agency that manipulation in exchanges can distort the prices in the government regulated markets.

Jesse Powell chief executive of the Kraken exchange told the WSJ that the "newly declared oversight" of how BTC prices form futures prices "has the spot exchanges questioning the value and cost of their index participation".

"We have definitely entered an unknown area where it is clear there is a desire for tightened oversight."

The sources said there are various possible cryptocurrency trading schemes. In spoofing, traders submit large orders that cause other traders to raise their buy price which, in turn, allows the spoofers to sell at higher prices.

CFTC has gone on record stating that, the disciplinary action was on the significant denial of access over bitcoin trading data, and the creation of an atmosphere of "fight" among the stakeholders. According to a report by the Wall Street Journal, "an anonymous source familiar with the matter CFTC is coordinating with the U.S. Justice Department in conducting investigations into price manipulation in the spot BTC markets".

Treasury slaps sanctions on firms aiding Russian Federation security service
Of particular interest are Embedi and ERPScan, who are both well known within the infosec community. The US has imposed another round of sanctions over Russian hacking.

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