While the investment community waits ‘drooling’ in the corner for the SEC to approve a bitcoin ETF, here is a really good reason why that may be a long wait; manipulation. Oh yeah, it does exist. But steps are being taken to try and eliminate the practices which will be a very good thing for cryptos to really take off. Note to the regulators (CFTC, Attorney Generals, SEC, etc.); don’t wait to approve new products until ALL abuses are eliminated……it can never be perfect (uh, what is end of month “window dressing?”). Take a read at the way bots do their dirty deed.
(Bill Taylor/Fintek Capital)
“As the office of New York Attorney General Barbara D. Underwood said in September, bots on large-scale crypto exchanges have been manipulating the price of Bitcoin for many years.
The report released by Attorney General Barbara D. Underwood read:
“When any venue tolerates manipulative or abusive conduct, the integrity of the entire market is at risk.”
But, with the Commodities and Futures Trading Commission (CFTC) cracking down on market manipulation through the usage of illegal software and the US Securities and Exchange Commission (SEC) punishing exchanges that engage in unregistered distribution of securities, experts believe the usage of illegal bots across global crypto exchanges will eventually subside.
Scale of Impact on Crypto
Speaking to The Wall Street Journal, CoinList co-founder and president Andy Bromberg stated that illicit bot trading and market manipulation is rampant in the cryptocurrency exchange market.
Although major markets like Japan and South Korea have newly imposed strict regulations to govern crypto trading platforms, most of the policies pertain to money laundering and security. The government of South Korea has said that it will oversee digital asset trading platforms as strictly regulated financial institutions potentially by the end of 2018, but the legislation still needs to be reviewed by the National Assembly of South Korea.
As of current, the vast majority of exchanges remain lightly regulated, even in developed cryptocurrency markets like the US, Japan, and South Korea. No regulations punish or discourage the usage of abusive strategies and take advantage of the poorly regulated crypto market…”