US Department of Justice, CFTC Probe Crypto Market Manipulation: Report

The U.S. Department of Justice is reportedly investigating cryptocurrency traders who may have manipulated the markets using old-school tricks.

AccessTimeIconMay 24, 2018 at 10:00 a.m. UTC
Updated Sep 13, 2021 at 7:58 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The U.S Department of Justice has reportedly launched a criminal investigation into cryptocurrency traders who may have manipulated the market using old-school illicit tactics.

According to a report by Bloomberg on Thursday, citing anonymous sources familiar with the probe, the investigation is being conducted together with the Commodity and Futures Trading Commission (CFTC).

One area of the investigation targets so-called spoofing – a technique that has been used in traditional financial markets to affect price movements by making large volumes of fake orders – that possibly influenced trades of bitcoin and ether, according to the report.

In addition, DoJ is probing crypto traders who may have cheated the system by sending themselves large volumes of orders to create a mirage of increasing demand in order to tip other investors into making a move.

The news marks the latest effort by U.S. authorities to ensure a fair cryptocurrency market since the CFTC gave the green light to domestic exchanges to list bitcoin-backed futures and derivative products late last year.

Today's report also comes just weeks after a commissioner from CFTC made comments on the agency's growing scrutiny over cryptocurrency activities that may have violated the law.

As previously reported by CoinDesk, speaking at a conference in Washington, D.C., CFTC commissioner Brian Quintenz said the agency is particularly focusing on "fraud, market manipulation and disruptive trading involving virtual currency."

Department of Justice image via Shutterstock

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.