All that digital gold you’ve got squirreled safely away in one of Wences Casares’ amputated-limb-proof, mountainside decommissioned, military bunkers is worth roughly 11% less than it was to start the week, and that’s thanks in no small part to the Justice Department which, in conjunction with the CFTC, is looking into possible manipulation in the cryptocurrency market.
Bloomberg reported the investigation on Thursday.
Apparently, the DoJ is concerned about spoofing and wash trades in Bitcoin, Ethereum and various other iterations of what are, at the end of the day, make-believe assets.
This is of course just the latest example of regulators and law enforcement agencies attempting to root out possible illegality in the cryptocurrency market and it’s patently absurd for all kinds of reasons, not the least of which is the fact that this whole damn charade resembles a giant, global multi-level marketing scheme.
I mean, of course there’s market manipulation going on in cryptocurrencies. But the larger issue is that the market itself feels in many ways like a collection of pyramid schemes competing with one another for new participants. Besides that, two of the selling points for cryptocurrencies are anonymity and lax regulation. More to the point, they are implicitly marketed as vehicles for tax evasion.
So asking if maybe there’s spoofing and wash trading going on is like staking out the Bada Bing! for prostitution. That is, yes, they’re hookin’ in there, but the real problem isn’t the hookers, it’s the fact that the business itself is a money laundering operation for the mob.
The truly farcical thing about the DoJ probe is that the CFTC is involved which kinda makes you wonder whether the first question Justice should ask is something like this: “Hey, why did you guys help legitimize this bullshit by giving the green light to futures trading?” And next, they might want to consider the fact that they’re spending taxpayer dollars to investigate a market that is a haven for tax evasion.
If the government is serious about this, what they may want to do is forget about going on a wild goose chase for nameless spoofers because that will invariably be an exercise in abject futility. As Trump would put it, “I don’t think anybody knows who it was, it could have been Russians but it could also be China and it could also be lots of other people, like somebody sitting on their bed that weighs 400 pounds, ok?”
Instead, maybe the DoJ might consider whether the whole damn thing should be shut down wholesale, overnight. That way, we can all wake up from John McAfee’s wet dream and get back to trading assets that are actually assets.
Oh, and finally, we’d advise any patrons of da’ Bing or similarly connected institutions to think twice about paying topless Moldovan blondes in Ethereum. Something tells us Silvio doesn’t want to give the Feds another reason to crawl up his ass.
This article provided by NewsEdge.