How criminals manipulate crypto-currency markets

by , under Uncategorized

Asia Times reports: Crypto-currencies are fairly new, loosely regulated and often treated as speculative assets, like stocks or bonds. That leaves a lot of room for fraud.

Bitcoin is more susceptible than stocks or bonds because so few people hold large amounts of Bitcoin and have been in the crypto-currency community for a number of years and know each other. They can take coordinated actions to increase or decrease prices – and because there’s no real regulation of crypto-currency markets, it might not even be illegal for them to do so.

Blockchain systems have some immutable security features, but  only if transactions happen within the system.  Scams include “spoofing,” in which people place orders but cancel them before the deal is finalized  and “wash trading,” in which one person sets up what looks like a legitimate purchase-and-sale deal, but actually does the deal with himself or herself.

Some countries are starting to regulate crypto-currency markets, either under existing regulations or new ones. The problems will likely shift to other countries that lack strong rules, which highlights the importance of international cooperation in investigations.

Source: How criminals can manipulate crypto-currency markets | Asia Times

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