Tuesday, July 23, 2024

    CFTC Demands Data from Exchanges Related to Bitcoin Price Manipulation Investigation

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    The Bitcoin price is volatile by nature. Not all of this volatility is created out of the blue either. An ongoing investigation regarding Bitcoin price manipulation is taking place. As such, U.S. regulators demand data from various trading platforms to address these concerns.

    Bitcoin Price Manipulation Investigation

    There have been swelling rumors regarding major Bitcoin price manipulation taking place. While such a development wouldn’t surprise a lot of people, proving nefarious activity is easier said than done. In this particular case, the manipulation is linked to the launch of Bitcoin futures. The Chicago Mercantile Exchange (CME) Group introduced such vehicles several months ago.

    While Bitcoin futures are not spectacularly popular, they do play an integral role in the market. These CME products derive the Bitcoin price from four key exchanges. The list includes Coinbase, Kraken, Bitstamp, and itBit. If any of these platforms is subject to manipulation, it will also influence the futures spot price.

    As such, CME is investigating the manipulation rumors. All four exchanges have been asked to share trading data after the settlement of the first futures contract. Unfortunately, it appears several companies have refused to cooperate in this regard. That doesn’t necessarily bode well in this regard.

    CFTC Officials Grow Frustrated

    This ongoing debacle has irked some U.S. Commodity Futures Trading Commission (CFTC) regulators. This entity is responsible for regulating CME and all of its activities. Yet, not having access to all of the necessary information poses a big problem, which cannot be solved immediately. It even warranted subpoenaing all exchanges for the data in question. Going through such motions shows this investigation is being taken very seriously.

    Additionally, this raises the question as to why CME doesn’t have agreements in place to demand such information. It is a grave oversight which doesn’t please the CFTC in the slightest. Having such agreements in place makes it easier to share trading data and avoids subpoenas accordingly. It remains unclear if this situation will be addressed moving forward.

    For the time being, there is no evidence to back up the manipulation claims. However, this data debacle shows there may be more to this situation than meets the eye. The CFTC will continue to coordinate with the U.S. Justice Department regarding this investigation. It also shows there is a growing desire to further legitimize cryptocurrencies as a whole.

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