New York Regulators Flag Concerns Over CME Bitcoin Futures, Coinbase Trading Activity
The New York Attorney General’s office released a report today that details the regulatory body’s concerns over the health of both Bitcoin (BTC) futures markets from CME Group (CME) and trading activity on several major exchanges.
In the report, regulators highlighted what they see as red flags regarding three cryptocurrency exchanges that aid in powering CME’s Bitcoin futures. Of the three flagged partners, Bitstamp and itBit have no formal policies pertaining to fighting market manipulation.
The third exchange, Kraken, refused to participate in the attorney general’s review, following allegations that the company presented “alarming” public statements regarding abusive trading, including claims that market manipulation “doesn’t matter to most crypto traders,” despite rampant scams.
The review has raised the possibility that CME’s futures value is derived from manipulated exchange data. United States government regulators have displayed continuous dismay at the lack of policing of manipulation within the cryptocurrency markets. The possibility that prices may be gamed was cited as a major reason behind the SEC’s recent rejection of several Bitcoin-backed ETFs.
Touching further on Coinbase, the report notes that almost 20% of executed volume on its platform is attributed to the company’s own trading. This has raised concerns among regulators, as they state that “high levels of proprietary trading raise serious questions about the risks customers face on those platforms.”
Neither CME or Coinbase has yet to comment on the report, at this time.