Regulators are investigating whether the bitcoin price was illegal
As a bitcoin continued its downward slide on Tuesday, US regulatory authorities look to see if there was record breaking in the year as a result of market manipulation.
The US Department of Justice investigates whether traders used sealing, a controversial crypto currency that the founders say is supported 1: 1 by a US dollar to set up bitcoin , according to a report by Bloomberg News, citing three people familiar with the case
Tether and Bitfinex did not immediately respond to CNBC's request for comments.
Federal prosecutors launched a criminal probe into the crypto curves earlier this year, Bloomberg reported. they suspect that traders on the encryption exchange Bitfinex might have used Tenger to coordinate bitcoins price moves illegally, reports Bloomberg.
Commodity Futures Trading Commission has also told Tether and Bitfinex, who share many of the same leaders, in December partly for to prove that these tokens are actually supported by a dollar reserve. The potential market streaks include "spoofing" or pl Assume false orders until the price hits a certain level, and then they pull the orders.
Other US agencies have broken down certain aspects of crypto currency in recent weeks. On Friday, the Securities and Exchange Commission announced its first civil penalties against cryptocurity stifters as part of a wide regulatory and legal breakdown of abuse in the industry.
Regulators are not the only ones who have flagged the tether's influence on bitcoin. 1[ads1]9659003] University of Texas, finance professor John Griffin, who has a 10-year view of spotting economic fraud, and Amin Shams's student published a June study saying that at least half of the jump in bitcoin was due to coordinated price manipulation.
In 66-page paper, the authors explained that tether was used to buy bitcoin at key moments when it went down, which helped "stabilize and manipulate" the price of the crypto award.
Tether, although it is supposed to reflect the price of a US dollar, often acts well under it. From Tuesday, tether was worth around 98 cents, according to data from CoinMarketCap.com. Bitcoin, meanwhile, traded close to $ 4,745 Tuesday after falling to about $ 4,200 earlier in the day. The price is lower than 75 percent since all the time high close to $ 20,000.
– Read the entire Bloomberg Report here.
