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Investors: Probe into Bitcoin Manipulation Is a Good Thing

Sead Fadilpašić
Last updated: | 1 min read

The US Department of Justice (DOJ) has started a criminal probe into potential Bitcoin trading manipulation, but major players remain unfazed. Both Mike Novogratz, a billionaire investor, and Cameron Winklevoss, president and co-founder of crypto exchange Gemini, agree that they’re not surprised by such allegations and that they welcome the investigation.

Source: iStock/traveler1116

Novogratz, who is setting up cryptocurrency merchant bank Galaxy Digital LP, told Bloomberg, “Weeding out the bad actors is a good thing, not a bad thing for the health of the market. Plenty of exchanges have these inflated volume numbers to create some sense of excitement around coins.”

Winklevoss said in an emailed statement to Bloomberg that, “We welcome any inquiry that serves to foster rules-based marketplaces and deter bad actors.” Tom Lee, of Fundstrat Global Advisors, agrees: “This is really welcome news ultimately because this means there is adult supervision coming/here.”

Spencer Bogart of cryptocurrency hedge fund Blockchain Capital said he wouldn’t be surprised to find price manipulations rampant: “I don’t have any first-hand evidence of manipulation of Bitcoin prices but given that even the most highly regulated and most liquid markets in the world (e.g. Libor, FX markets, commodities) have consistently proven to be manipulated, it wouldn’t be a huge surprise.”

On Thursday, Bloomberg published a report that the DOJ opened a criminal probe into potential manipulation of the price of Bitcoin and other digital currencies, citing four people familiar with the matter.