The Commission on Trade in Futures on Merchandise of the United States (CFTC) has requested information regarding its activities from various cryptocurrency exchange houses, in the framework of an investigation into the apparent manipulation of bitcoin futures prices.
A report by The Wall Street Journal notes that the CFTC seeks to determine if there is manipulation of prices in these markets, which have been launched progressively since the end of last year and since they are instruments that forecast the prices of an asset, they can be the object of interest of some to get the most profit possible from them in a relatively short period of time.
The Bitstamp, Coinbase, itBit and Kraken exchange houses are under the eye of the regulators, as the value of the futures of the Chicago Mercantile Exchange Group (CME) is based on these exchange houses and they believe that the market in the markets could have been manipulated. last months.
One of the methods of manipulation cited by the source is the practice of spoofing, where a market participant inserts many large purchase orders to make other participants believe that the amount of available bitcoins decreased exponentially. In this way, an increase in demand and therefore in prices is motivated.
According to the sources, the exchange bureaus refused to the initial request of the CME group to supply the information of commercialization and exchange of cryptocurrencies in its platform, because the exchange houses considered the request too invasive.
Although the companies later collaborated with the CME, this entity did not consider that the information provided was sufficient. Because of this, the CFTC, an office coordinated by the US Department of Justice, intervened to advance the request. The institution required to know the identity of the investors, as well as the hours of the exchanges, the canceled or incomplete orders and the size of these orders.
The sources that have revealed the information affirm that this case has reached high levels of the state, who are allegedly pressuring the exchange offices to give more complete information in this regard. These measures are accentuated as the closing of bets for bitcoin futures prices approaches, which will culminate on the last Friday of this month, June 29.
That day a betting window will open for one hour. During this time, the CME Group and the CFTC will monitor the financial activity to ensure that some individual exchanges do not significantly affect the bitcoin price.
Although most exchange houses have not spoken, Jesse Powell, CEO of Kraken said that the CFTC's concerns are exaggerated because the chances of manipulating the market and generating a significant profit are minimal.
The CFTC has been vigilant regarding compliance with the regulatory and operational statutes of these platforms, as they believe that bitcoin could lead to new financial phenomena and market manipulation. Therefore, at the end of May, they launched an advisory program for exchange houses and other entities to fulfill their responsibilities when issuing products derived from cryptocurrencies. During this year they also listed price indexes for Ether, although they do not offer futures for this cryptoactive.
On the other hand, the decision to investigate these exchange platforms could have partly stimulated the decline in the prices of bitcoin and other cryptocurrencies in recent days. This measure could lead to an atmosphere of distrust in the markets.
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