The second day of Blockchain Expo Europe is still in full swing. At three o’clock this afternoon Tony Sio spoke about market manipulation on cryptocurrency exchanges. Sio is head of Market Regulation and Technology at NASDAQ. He analyzes various financial markets, including the cryptomarket.
Everyone is suddenly talking about regulation
Tony Sio: “When I spoke at events like this a few years ago, everyone was just talking about digital currencies and blockchain. Regulation as a word did not even occur. How different are the times now? You cannot talk about cryptocurrencys without also mentioning regulation. “
Market manipulation is the biggest challenge in the field of regulation. The American Commodities and Futures Trading Commission (CFTC), for example, argues for more market surveillance.
Bitcoin ETF not yet under discussion
Sio also refers to the recent judgments of the Securities and Exchanges Commission (SEC). “A bitcoin ETF is not yet under discussion, because the SEC is concerned about market manipulation with bitcoin.” This is also apparent from a report published by BItwise in March, which states that 95 percent of the trade volume of bitcoin fake is.
Pump and dump is not new
How does market manipulation then take place in cryptocurrency? One of the methods is a pump and dump. This is how it works: someone buys a random cryptocurrency or token. Then he or she tells on social media that everyone should buy the coin. This often happens in so-called “pump and dump groups” on Telegram messaging service.
Because everyone buys, the price rises artificially. And then the coin is “dumped”, or sold en masse.
But according to Sio this is not new and certainly not only with cryptocurrency: “Actually, this kind of practice happened as early as the 1920s. New technologies made it possible for people to spread information quickly. Even then, pump and dumps were spread with Telegram. Only then the analogue variant. “
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