United States Commodity Futures Trading Commission (CFTC) is looking into the crypto related exchanges for the manipulation of the price charges. The reports began to surface in the Wall Street Journal.
The grapevine is awash with the info that the CFTC is going to demand massive data from these exchanges. The chief concerns of CFTC is the question of the influence of the manipulation of prices over the cryptocurrency market.
The initial probe which has propelled the CFTC to take this step began during last year’s December. The rise of Bitcoin to 20,000 USD happened during that time. CME group has allegedly tried to used the data from four crypto exchanges. They used it to form its range of future Bitcoin prices.
The four crypto exchange involved were Bitstamp, Coinbase, Kraken and itBit. These are major player in the crypto market. Given their propensity to direct the crypto exchange, they have massive trading data related to crypto trade.
Investigators are trying to use such data to determine the possibility that the manipulative conducts affected the prices of Bitcoin in any major way. The CME has played legal tango with these groups and outmaneuvered them to provide it some data in a very short time frame.
CME seek the information first through indirect means. According to Wall Street Journal, the company has employed a London based company. The company uses similar algorithms to determine the prices of Bitcoin by mining data. Crypto exchanges were reluctant to share their data as the firm has also involved in crypto exchange.
However, the red flag was that the CME don’t have the agreements which directs the crypto exchanges to share price data. These data are required if it is related to some future contracts. This infighting between CME and other crypto exchanges have provided CFTC to open the investigation.
The regulators action should be watched closely as it will have significant impacts on the future markets. Given the size of the crypto trade these four conducts and the possibility of the government getting their hands on data, they might hit some interesting targets.
