WSJ: Automated Trading Programs Manipulate Digital Currency Prices

Automated trading programs or robots are manipulating digital currency prices on exchanges, according to wall street journal.
Automated trading software is a program that allows traders to set specific rules for both trade entries and exits, submit orders to a market center or exchange, and then automatically executes them by means of a computer at speeds greater than any human is able.
Trade programs have been available for traditional and unorthodox markets and for both legal and manipulative strategies. The crypto markets make an error of proper regulation, which enables the fact that the bots to use abusive techniques at an industrial level.
Andy Bromberg, the co-founder, and chairman of startup CoinList told WSJ that there is a lot of activity like this in the market. this hurts a market, and also hurts individual investors.
According to WSJ, $80-million digital currency fund Virgil Capital uses its own robots on several crypto exchanges around the world. Stefan Qin, manager of Virgil Capital, told that he was in a constant cat and mouse game with an enemy bots.
In a trade with ethereum, Virgil lost funds earlier this year after the “molester robot” attack. The WSJ further explains the strategy used by robots:
The robot + spoofing strategy was similar to a practice in which traders entering false orders only to cancel them .the tactic aimed at cheating and selling the assets by false investors and buyers, which was placed on inadequate bans, was prohibited in the USA stock and futures markets in 2010.
Another example of price manipulation in digital currencies would be through a program called Quatloo traders, which was promoted as “the best market – manipulation tool in the world of crypto”. The idea of the program is to sell manipulation using tools like a special tab called whale tools, which uses several violent strategies. The author states there is no need to ban manipulation in digital currencies, and that it would more effective to provide manipulation tools. “if anyone can manipulate, nobody’s manipulating. You can’t ban all of the people who have chosen to use it”.
In particular, these applications are not legal for traditional exchange or traditional securities. The New York Stock Exchange monitors and punishes this kind of behavior. Last week, it was reported that nearly $ 90 million in funds were laundered by several exchanges that use the shapeshift service. Yesterday, Shapeshift CEO Erik Voorhees declared against these claims. He stated that this publication was wrong and made mistakes in their reports due to a lack of knowledge of the exchange and of blockchain technology.

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