Regulators from the US Commodity Futures Trading Commission[1] (CFTC) reportedly demanded extensive trading data from several cryptocurrency exchanges, people familiar with the matter told the Wall Street Journal[2] June 8. Regulators requested data in order to investigate whether manipulation might be compromising prices in digital currency markets.
The probe followed the launch of Bitcoin (BTC) futures[3] by CME Group[4] in December last year. CME forms its Bitcoin[5] (BTC) futures prices based on data from four crypto exchanges[6]; Bitstamp[7], Coinbase[8], itBit[9] and Kraken[10], where manipulative trading could reportedly have distorted the value of BTC futures. Investigators are going after trading schemes that can be used to manipulate the price of BTC futures that the government directly regulates.
After the settlement of the first contract in January, CME requested that the four exchanges provide trading data. However, several of the exchanges declined to cooperate, stating that the request was intrusive. The crypto exchanges only handed over their data once CME shortened the time window of its request from one day to a few hours, said the sources.
According to the WSJ, CME originally sought the information through a third-party, London-based company that calculates the Bitcoin price to use for its futures contracts. The sources added that the crypto exchanges did not want to hand over data to the British firm, which also runs its own trading platform.
Reportedly, regulators from the CFTC were upset that CME does not have agreements which obligate crypto exchanges to share price data that is related to futures contracts. According to the WSJ’s sources, the quarrel between CME and the crypto exchanges was an impetus
