The total cryptocurrency market cap tumbled below $320 billion as the majority of coins are falling at high mid-single digit rate for the second consecutive day. Bitcoin Cash price is the second biggest loser in the top ten coins. Ethereum leads the selloff in cryptocurrency market; ETH coin dipped 10% early today to $557, the lowest level in the last month.
Cryptocurrency Market Manipulation Probe
Regulators all around the globe have been warning crypto exchanges to enforce fair trading requirements and anti-money laundering laws. The CFTC officials and the US Justice Department, however, launched new investigations against Bitcoin and other digital currencies amid wash trading and spoofing activities.
These types of price manipulation activities are illegal in investing and trading markets all over the globe.
What is spoofing? Spoofing is a type of price manipulation activity whereby spoofers employ certain tactics such as placing bids with the intent to cancel before the orders are filled. It is used by traders to outperform other market players and to create false optimism or pessimism in the market.
Wash trading, on the other hand, is also a type of market manipulation activity in which groups of investors collectively sell and then buy the same asset creating artificial activity.
Market Reaction is Strong Against Price Manipulations
Market participants say that: price manipulation activities are easier in unregulated markets like the emerging cryptocurrency markets. The majority of investors are against these price manipulation activities because it doesn’t offer fair trading practices. They believe the probe is good for the long-term health of cryptocurrency markets.
Professor John Griffin said, “There’s very little monitoring of manipulative trading, spoofing and wash trading. It would be easy to spoof this market.”
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