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In Crypto, Market Manipulation Remains a Problem What is Market Manipulation in Cryptocurrency? - Binance Blog In fact, many criminals are using cryptocurrency as a way to launder money from illegal activities such as drug trafficking or terrorism financing. Your crypto portfolio should include a healthy mix of different assets according to your risk appetite. Following in the wake of the Terra Luna stablecoin crash, Chinese authorities signalled even tighter restrictions on crypto may be in the works. DOJ has not recently used wire fraud in a large-scale market manipulation case, but it is likely to be a next area of focus, given public reports of market manipulation and spoofing (creating orders with the intent to cancel) by crypto whales, who are individuals or entities that own substantial amounts of a particular cryptocurrency. Wash Trading in Crypto Markets While cryptocurrency is legal in most nations, certain governments have restricted or banned its use . Whales will sometimes drive prices to liquidate their shorts and benefit from a long position of equal size. (See, e.g.,United States v. Chanu, (7th Cir. The low volume of specific coins is easy to manipulate, and the large spikes followed by a drastic drop are all too common, especially on smaller crypto exchanges. That's unclear. A spate of buys drives prices up, sometimes triggering buying algorithms and bots, until the manipulator sells, causing the price to crash both from market pressure and whatever rumor turned out to be false. Nasdaq 2022 Cryptocurrency Regulatory Guide | Nasdaq Crypto Trade Surveillance: An Essential Tool for Regulatory Compliance Market Manipulation Is Like Pornography: You Know It When You See It Companies often respond in real time to market events. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. That case involved a Wall Street Journal columnist, who wrote about new stocks in his column. Mr. Williams praised the investigative work of the FBI and further thanked the Department of Homeland Securitys Homeland Security Investigations and the Internal Revenue Service-Criminal Investigation for their assistance with the investigation. Manipulation can cause a crypto's price to rise or fall depending on the manipulator's goals. Payments, Grocery Third, while a large majority of trading on the major cryptocurrencies currently occurs on large, well-known and well-regulated exchanges, there are hundreds, if not thousands, of small exchanges on which smaller alt-coins as well as bitcoin and ether are traded, many of questionable honesty and with thin liquidity. Wash trading is similar to whale wall spoofing because they both feed misleading information to the market. Is market manipulation of cryptocurrency illegal? - Quora SDNY alleged that the creators of the Frosties NFT collection committed a $1.1 million rug pull by falsely promising purchasers that in addition to cartoon-like images, they would receive perks, such as giveaways and access to a metaverse game.