News Regulation

The CFTC requested trading data from bitcoin exchanges in the investigation of price manipulation

Government investigators have demanded that  several bitcoin exchanges hand over comprehensive trading data to assist an investigation into whether manipulation is distorting prices in markets linked to the cryptocurrency.

The investigation followed the launch of bitcoin futures on CME Group Inc.’s exchange a half a year ago. CME’s bitcoin futures derive their final value from prices at 4 bitcoin exchanges: Bitstamp, Coinbase, itBit and Kraken. Manipulative trading in those markets could skew the price of bitcoin futures that the government regulates.

CME, which launched bitcoin futures in December, asked the 4 exchanges to share trading data after its first contract settled in January. But several of the exchanges declined to comply. The exchanges ultimately provided some data, but only after CME limited its request to a few hours of activity, instead of a full day, and restricted to a few market participants.

In response to the dispute, the Commodity Futures Trading Commission (CFTC) subpoenaed the exchanges for the data.

The commission was upset CME didn’t have in place agreements that would make bitcoin markets to share trading data tied to futures contracts. Such agreements would detail what information the cryptocurrency venues would have to provide to CME, including the time of trades, unfilled or canceled orders, the size of orders, and traders’ identities.

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