CFTC Subpoenas Crypto Exchanges for Trading Data in Bitcoin Price Manipulation Probe

11.06.2018

The US Commodity Futures Trading Commission (CFTC) has sent subpoenas to several Bitcoin exchanges, demanding they provide trading data records in order to gather evidence for a recently launched investigation into Bitcoin price manipulation.

The Wall Street Journal reported on June 8 that the CFTC had become interested in trading data from four exchanges - Bitstamp, Coinbase, ItBit, and Kraken - after the CME Group launched Bitcoin futures in December 2017.

The CME Group, which owns the Dow Jones index, NYMEX, and COMEX, is one of the largest options and futures exchanges in the world. According to the WSJ report, the CFTC sought data from the four exchanges in January 2018, but received a limited and unsatisfactory response.

The US Department of Justice (DOJ) launched a far-reaching investigation into Bitcoin price manipulation in May 2018, focusing on identifying potentially illegal trading practices, such as spoofing and wash trading, that may have had an artificial impact on the price of Bitcoin.

Spoofing occurs when traders place large orders and cancel them shortly after, whilst wash trading refers to artificial boosts in trading volume that occur when one organization trades between their own accounts.

Even though exchanges do not follow the same rules as futures markets, the CFTC views Bitcoin as a commodity, which means that the CFTC has the power to investigate fraudulent Bitcoin trading practices.

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