Skip to main content

The Justice Department is now cracking down on cryptocurrency scams

The U.S. Department of Justice is now working with the U.S. Commodity Futures Trading Commission to launch a criminal investigation to determine if cryptocurrency traders are manipulating prices using illegal practices. The news arrives by way of four unnamed people close to the federal probe who state that the private investigation is now underway and in its early stages. 

According to the sources, federal prosecutors are determining if traders are using a tactic called spoofing, which is the act of flooding the market with fake orders to increase demand and drive prices upward, and then canceling those orders. Another tactic is wash trading where a cheater trades with himself/herself to artificially inflate market demand, driving up prices. 

Related Videos

The lure of cryptocurrency is that it’s not tied to any bank or government. At the same time, digital coins are not regulated by the U.S. Securities and Exchange Commission (SEC), thus traders are essentially on their own, unprotected against a Wild West-like market. There is no real guarantee that cryptocurrency exchanges are actively pursuing cheaters, and there are no means of recovering lost monies stemming from fake cryptocurrency startups. 

A good example of the current cryptocurrency woes is the initial coin offering (ICO). Companies promising to launch a new cryptocurrency platform will offer “valuable” tokens in exchange for early investments — something akin to Kickstarter where projects enlist financial backers that receive a product in the end. In this case, cryptocurrency startups are disappearing with the cash instead of launching their digital coin platforms. 

By March, these ICO-related scams reached to the point that the SEC opened investigations to crack down on companies, lawyers, and advisory firms promoting these ICOs. The government agency believes all virtual currencies should be listed as securities — a tradable financial asset that gains worth over time — and registered with regulators. There are securities laws in place to protect investors against fraud. 

Despite the growing interest in cryptocurrencies like Bitcoin and Ethereum, the market is considered volatile. For instance, a single Bitcoin was worth $6,897 on November 6, 2017, skyrocketed to $17,549 just over a month later, then dropped back down to $7,964 at the beginning of February. Since then, the value of a Bitcoin has experienced rises and drops resembling mountain peaks. 

The current Bitcoin slump reportedly stems from nations such as Japan and the Philippines now regulating cryptocurrency. China is banning cryptocurrency exchanges altogether. Even more, Microsoft and Google are banning cryptocurrency-related advertisements from their ad networks due to the unregulated, volatile nature of digital currency and the related scams. 

Meanwhile, the U.S. Commodity Futures Trading Commission (CFTC) doesn’t regulate the actual trading of digital coins (aka spot markets), but instead deals with futures, which are legal agreements to purchase or sell an item at a set price on a set date in the future. The agency also deals with options, which are contracts providing buyers the right to buy or sell an asset for a specific price on a specified date. 

Still, the CFTC is capable of imposing sanctions if it discovers fraud in spot markets. 

Editors' Recommendations

The Lenovo Slim Pro is the best answer to the MacBook Pro I’ve seen yet
A press photo of the Slim Pro 9i on a white background.

Since the launch of the redesigned MacBook Pro in 2021, Windows laptops have struggled to produce a true rival. The new Lenovo Slim Pro, though, looks to be the full package, especially in terms of its performance and screen.

The top-of-the-line new model, the Slim Pro 9i, matches the MacBook Pro in a few important ways, starting with the display. This is one of the first Windows laptops oriented toward creatives that adopts a mini-LED screen, switching from the OLED options that were previously available.

Read more
Flash sale drops the price of these Dell work-from-home laptops
dell business laptops flash sale march 2023 vostro 16 on desk

Dell is always a popular place for laptop deals and today, it has a focus on business laptops that are ideal for anyone working from home or commuting regularly. With plenty of options out there, we've picked out some of our favorite deals. Encompassing different budgets and needs, there's a laptop for every kind of business here. Let's take a look at what to expect.
Dell Latitude 3520 -- $699, was $1,166

The Dell Latitude 3520 is a fairly reliable workhorse of a laptop while still being well-priced. It has an 11th-generation Intel Core i5 processor along with 8GB of memory and 256GB of SSD storage. That makes it a little long in the tooth compared to some other models but it's a robust design as you'd expect from one of the best laptop brands. A 15.6-inch HD screen only offers a 1366 x 768 resolution but that helps keep battery life high with ExpressCharge helping you get to 80% in an hour. Intelligent audio helps enhance audio quality while on calls and there's ExpressConnect which helps you connect to the strongest access points in your office. A numeric keypad rounds off the useful set of features.

Read more
Best VPN services 2023: today’s top picks
best VPN services

In today's digital world, the internet is used for everything from work and education to shopping, socializing, and managing finances. This makes it crucial to prioritize your online privacy. Fortunately, there's an affordable and simple security solution available, even for those of us who lack technical expertise: a virtual private network, or VPN. A reliable VPN safeguards your devices and keep your online activities hidden from cyber-criminals, network snoops, institutional censors, online busybodies, and other uninvited guests. However, with so many VPNs to choose from, finding the right one to meet your needs and budget can be a challenge. To help you out and potentially save you some money, we've put together a comprehensive list of the best VPN services, complete with pricing, features, and other essential info.
Best VPN 2023

Hotspot Shield
Private Internet Access
Kaspersky VPN

Read more