The United States Department of Justice has launched a probe into claims of market manipulation across bitcoin and other cryptocurrency markets. The investigation is in collaboration with the Commodities and Futures Trading Commission, which oversees derivatives of bitcoin and other coins.

According to a report from Bloomberg, the investigation is only in its early stages, and is focused on both bitcoin and ethereum, as well as various altcoins.

The investigation is aimed at manipulation techniques including ‘spoofing’ and ‘wash-trading’. Spoofing is a practice where traders place fake large volume orders on exchanges in an attempt to lure inexperienced investors into buying or selling, only to remove the order before it ever completes. Wash-trading involves a trader, or even a group of traders, trading back and forth with themselves to create an illusion of more market activity than what actually exists.

These behaviors allow ‘market makers’ to push the price of an asset in their desired direction, often resulting in substantial profit. Such market manipulation is illegal in traditional markets, and the activities put a spotlight on why regulation is so necessary for the budding cryptocurrency market that’s full of inexperienced traders.

Cryptocurrency, given its semi-anonymous design, its unregulated global market, and the overall lack of anti-money-laundering and know-your-customer enforcement at exchanges around the globe, makes it a market rife with manipulation and other fraudulent activity.

Financial regulators from key countries such as China, Japan, South Korea, Europe, and the US have been actively increasing efforts to establish guidelines for exchanges, but due to the complexity of the new asset class, there’s not a one-size-fits-all solution. Instead, officials at top exchanges such as Gemini’s Cameron and Tyler Winklevoss, believe that exchanges should band together to self-regulate.

Bitcoin’s price dropped to a May low of $7300 as a result of the news.

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Former Obama Aide Targeted by Anti-Crypto Political Ad for Accepting Bitcoin Donations
Brian Forde, a California Democrat running for the US House of Representatives, is accepting accepting campaign donations in Bitcoin. Vice’s Motherboard reports that Forde, “was a senior advisor to the Obama administration who wrote the White House memo on cryptocurrency. Now his congressional campaign is under attack by his opponent for accepting Bitcoin donations.”

MIT Researchers Testing A Smart Contract-Powered Bitcoin Lightning Network
MIT is exploring the application of smart contracts on Bitcoin Lightening Network to see if it can handle millions of transactions, and with a greater degree of complexity.

PayPal: We’ll ‘Certainly Support’ Bitcoin If It Becomes ‘Better Currency’
PayPal’s CFO, John Rainey, told CNBC cthat volatility was the reason PayPal does not currently “see a lot of interest” from its merchants regarding cryptocurrency acceptance. However, he signaled PayPal was not giving up on Bitcoin. “Right now, we don’t see a lot of interest from our merchants,” Rainey went on to say. “But if it’s something that stabilizes in the future and is a better currency, then we’ll certainly support that.”

Introducing Monero’s Ethereum-Killer: Tari
A group of industry experts are building a brand new protocol built on top of the Monero network that will enable token creation.


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Verge Blockchain Exploited Again, Hackers Steal $1.7 Million in Tokens
Last month, privacy-focused cryptocurrency Verge was the victim of a ’51 percent attack’ – an unfortunate scenario (for Verge and its investors) that resulted in roughly 250,000 XVG being stolen. Verge responded with a hard fork, but unfortunately, it appears the vulnerability still persists today despite countermeasures being taken. BlockExplorer’s Tony Spilotro reports.

Pentagon Contemplates Whether to Flag Cryptocurrency Owners as Risky
The Pentagon is trying to decide if owning cryptocurrency is an indicator of risky personal behavior, one that should flag extra scrutiny in security clearances.

TapJets Adds Ripple and Litecoin for Flight Bookings
TapJets, an American company that offers customers to submit private charter requests with their smartphones, makes it easy for users to pay for services with Bitcoin, and now also Ripple and Litecoin.

Bitcoin Cash is a Must-Own, Says Crypto Investor Brian Kelly
A proposed bitcoin cash development fund could give the digital currency more value, said cryptocurrency trader Brian Kelly to FastMoney this week.

​Akamai, Mitsubishi UFJ Financial Announce Blockchain-Based Payment Network
The payment network, ZDnet reports, “is expected to be capable of processing more than 1 million transactions per second, thanks to blockchain.”

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Twitter CEO Jack Dorsey: Bitcoin Should Be Native Currency of the Internet
Twitter and Square CEO Jack Dorsey stood on stage at the Consensus conference, saying Bitcoin should be the cryptocurrency of the internet.

Adware Bundle Makes Chrome Invisible to Launch Cryptojacking Attacks
ZDNet reports, “CPU usage spikes up to 80 percent on infected machines.”

The SEC Launches Phony ICO Site to Promote Scam Awareness
In a bid to raise awareness of potential investment scams in the cryptocurrency space, BlockExplorer’s Tony Spilotro says the U.S. Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy have launched a fake website posing as a luxury travel firm kicking off the pre-sale portion of their initial coin offering (ICO).

Largest Bank in the Philippines Showcases Bitcoin Mining Equipment
The cryptocurrency world is buzzing upon the news The Philippines largest bank is dabbling in Bitcoin. NewsBTC reports, “UnionBank recently demonstrated its cryptocurrency miners at a business conference. That is an interesting development, considering how the world’s leading cryptocurrency is a legal tender in the country.”

PwC China Survey Finds That Most Companies Prefer to Investigate Blockchain Internally
Rebecca Campbell of BlockExplorer reports, “A joint survey by PwC and VeChain has found that most enterprises prefer to setup their own in-house research and development (R&D) teams to investigate the blockchain.”

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In a bid to raise awareness of potential investment scams in the cryptocurrency space, the U.S. Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy have launched a fake website posing as a luxury travel firm kicking off the pre-sale portion of their initial coin offering (ICO).

The website HoweyCoins.com, is a tongue-in-cheek play on everything your run-of-the-mill bogus ICO offers. From ‘too-good-to-be-true’ promises, to flashy images of champagne bottles and palm trees, to convoluted and often-plagiarized whitepapers, to pre-sale bonus countdown clocks, the SEC’s spoof site has got all of the common enticements found on fraudulent sites.

In a press release titled “The SEC Has an Opportunity you Wont Want to Miss: Act Now!” SEC Chairman Jay Clayton explained the motivation behind HoweyCoins:

“The rapid growth of the ‘ICO’ market, and its widespread promotion as a new investment opportunity, has provided fertile ground for bad actors to take advantage of our Main Street investors,” with Clayton adding:

“We embrace new technologies, but we also want investors to see what fraud looks like, so we built this educational site with many of the classic warning signs of fraud. Distributed ledger technology can add efficiency to the capital raising process, but promoters and issuers need to make sure they follow the securities laws. I encourage investors to do their diligence and ask questions.”

Anyone who clicks on the “Buy Coins Now!” Button will be redirected to educational materials from the SEC warning users of potentials scams and what red flags to look out for. Some of the red flags outlined include celebrity endorsements, claims of guaranteed returns, claims of SEC-compliance, and more.

Even the site name HoweyCoins is an Easter egg referencing the “Howey test” – a test created by the Supreme Court stemming from the SEC v. W.J. Howey Co. case in 1946, aimed at determining whether a financial transaction qualifies as an “investment contract.”

Who knew the SEC was this funny? Still, fraudulent investments are no laughing matter, and the SEC has done a solid job at raising awareness of the potential pitfalls of cryptocurrency investing, all while serving as an entertaining break from the daily grind.

For educational information on how investors can protect themselves, visit investor.gov or use the Buy Coins Now button on HoweyCoins.com.