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Cryptocurrencies sink on price manipulation concerns

Summary:

  • University of Texas scholars suggest that Bitfinex may have been manipulating Bitcoin price

  • A global cryptocurrency exchange rules may be looming

  • Reserve Bank of India admits it has not researched the digital asset sphere before issuing a ban

Over the past 24 hours cryptocurrency market took a hit as there were concerns raised that the last year’s Bitcoin bull run could have been caused by the price manipulation. The declines are observed on all the major coins with Bitcoin price tumbling below the $6500 handle. The University of Texas report suggests that the cryptocurrency exchange Bitfinex may have used other coin called Tether to support the price of the most famous digital currency. As Tether is a coin being supposedly backed by the US dollars (one-to-one) academics suggest that the exchange may have been issuing new Tether coins and using them to support Bitcoin price at times of low demand. Bitfinex denies accusations saying that it has never engaged in any sort of price manipulation.

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The descending trendline provided a support for BITCOIN price as of late. However, the price manipulation news caused BITCOIN to smash through the $6500 handle and the earlier mentioned trendline. Right now bulls are trying to recoup some losses but the trendline seems to be working as a resistance now. Source: xStation5

Majority of people is not aware that something like the Financial Action Task Force even exists. It is not surprising as we do not hear about FATF often. It is an international group of almost 40 countries that is combating the money laundering and terrorism financing. As these two issues are often raised by central banks as a reason behind their reluctance towards digital assets the group decided to pay bigger attention to the matter. Namely, FATF is said to be preparing a binding rules for the cryptocurrency exchanges. The discussion over the framework are said to begin on June 24. If this turns out to be true and the member countries decide to implement the regulations it will be the first cross-border set of rules concerning the cryptocurrency sphere.

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RIPPLE was also impacted by the concerns over the Bitcoin price manipulation. The coin broke below the previous low at $0.55. As the closest support may be localized at $0.457 the cryptocurrency may need a positive impulse to prevent deeper decline. Source: xStation5

The Reserve Bank of India banned domestic financial institutions from doing any operations related to the cryptocurrencies on April 5. The institutions were given 3 months to comply with the new regulations. This looks like an old story and therefore one could ask why do we write about it? The Indian central bank has recently replied to the Right of Information query from one of the lawyers. In its reply the RBI admits that it has not conducted any complex research ahead of issuing a ban. The Bank stated that no committee has been constituted to deal with the issue or at least understand its nature. Having said that it turns out that the country’s central bank almost killed the domestic crypto industry by issuing a decision that was not backed by any research. The decision was of course made in the name of consumer protection and money laundering concerns.

 

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