US lawmakers seek to prevent crypto price manipulation

Two U.S. congressmen from Florida and North Carolina have introduced bipartisan bills that aim to prevent cryptocurrency price manipulation.

Congressman Darren Soto and Ted Budd have introduced the bills that direct the Commodity Futures Trading Commission (CFTC) and other financial regulators to make recommendations for how to improve the crypto regulatory environment for both consumers and businesses. The two bills are

• The Virtual Currency Consumer Protection Act of 2018
• The U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018.

The first bill calls upon the CFTC to describe how price manipulation could take place in virtual markets. It also directs the regulator to make recommendations for regulatory changes that can improve its monitoring procedures in preventing price manipulation.

The second bill directs the CFTC to conduct a comparative study of the crypto regulation in other countries and then make recommendations for regulatory changes to promote competitiveness in the U.S.

In a joint statement, Soto and Budd said:

“[W]e must ensure that the United States is at the forefront of protecting consumers and the financial well-being of virtual currency investors, while also promoting an environment of innovation to maximize the potential of these technological advances. This bill will provide data on how Congress can best mitigate these risks while propelling development that benefits our economy. ”

In a report published in September, the New York Attorney General’s office underscored the vulnerability of crypto trading platform to price manipulation. In addition, the Wall Street Journal in October explained how crypto bots can be used to manipulate the price.

In May 2018, the U.S. Department of Justice launched its probe to determine if traders are manipulating the price of Bitcoin and other digital currencies, according to Bloomberg. More recently, the Justice Department began investigating whether the price surge seen in the crypto market in 2017 was driven in part by manipulation.