Billionaire Mike Novogratz and other top cryptocurrency bulls are welcoming the U.S. Department of Justice’s newly-launched investigation into bitcoin price manipulation, saying the crackdown will weed out bad actors and help legitimize the burgeoning crypto market.
“Weeding out the bad actors is a good thing, not a bad thing, for the health of the market,” Novogratz told Bloomberg. “Plenty of exchanges have these inflated volume numbers to create some sense of excitement around coins.”
Novogratz, the founder of startup crypto merchant bank Galaxy Digital, echoed the sentiments of the Winklevoss twins, Tyler and Cameron, who have said for months that some regulation of the currently-unregulated virtual currency market will help — not hurt — the industry.
“We welcome any inquiry that serves to foster rules-based marketplaces and deter bad actors,” said Cameron Winklevoss, president of cryptocurrency exchange Gemini.
Fundstrat’s Tom Lee: ‘Adult Supervision Is Coming’
In fact, the Winklevoss twins are so committed to ridding the crypto ecosystem of fraudsters and con artists that they partnered with Nasdaq to crack down on fraudulent bitcoin and ether trading on their exchange, the Gemini Trust Company.
Avowed bitcoin bull Tom Lee, co-founder of Fundstrat Global Advisors, agrees with the Winklevoss twins and Mike Novogratz. “This is really welcome news ultimately because this means there is adult supervision coming,” Lee said.
Bitcoin prices tanked today, hours after news broke that the Department of Justice opened a criminal investigation into whether traders are manipulating the price of bitcoin and other cryptocurrencies by flooding the market with fake orders in a bid to manipulate other traders into buying or selling.
“The investigation surrounds the practice of spoofing — where an investor places orders that are intended to manipulate the price of an instrument — and flooding the market with fake orders. Federal prosecutors are also working with the Commodity Futures Trading Commission,” CNBC reported.
Warren Buffett And Bill Gates Hate Crypto
Many market participants said they wouldn’t be surprised to find instances of fraud given the opaque, unregulated nature of the digital currency market.
The wild daily bitcoin price fluctuations have raised eyebrows and garnered countless headlines, but they also triggered regulatory scrutiny and the disdain of many top business leaders, such as billionaires Warren Buffett and Bill Gates.
Both Buffett and Gates have trashed bitcoin and the entire crypto market as speculative gambling that only attracts criminals.
“In terms of cryptocurrencies, I can say with almost certainty that they will come to a bad ending,” Buffett warned. “When it happens or how or anything else, I don’t know.”
On the flip side, bitcoin evangelists like the Winklevoss twins and Twitter billionaire Jack Dorsey remain steadfast in their conviction that bitcoin and cryptocurrencies will ultimately displace all other currencies.
“The world ultimately will have a single currency, the Internet will have a single currency,” Dorsey predicts. “I personally believe that it will be bitcoin.”