CFTC Subpoenas Cryptocurrency Exchanges In Bitcoin Futures Investigation

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Bitstamp, Coinbase, itBit, and Kraken were targeted. The future’s looking a bit dim.

Due to suspicions of market manipulation that may impact the final settlement price of CME’s bitcoin futures, the Commodity Futures Trading Commission (CFTC) has reportedly subpoenaed four cryptocurrency exchanges. According to the Wall Street Journal, the regulator demanded that the exchanges – Bitstamp, Coinbase, itBit, and Kraken – provide “comprehensive trading data to assist a probe into whether manipulation is distorting prices” in the bitcoin-linked futures market.

This is a complicated matter because the CFTC has claimed oversight and enforcement authority over cryptocurrency-based financial derivatives like bitcoin futures, but seems to possess only enforcement authority over the cryptocurrency spot markets. The inquiry revealed by the Journal on Friday is distinct from the CFTC-DOJ investigation into bitcoin price manipulation, which ETHNews covered last month.

Although CME requested trading data from the exchanges after its first bitcoin futures contract closed in January, a few of the platforms refused to share the desired information, according to the Journal’s unnamed sources. Later, the exchanges granted a limited request (with the scope of a few hours rather than an entire day’s worth of trades). Also, it appears the data that the exchanges did provide only included select market participants, as opposed to a complete order book. The CFTC was not happy with this lack of transparency, which, it seems, led to the subpoenas.

The reported concerns about potential manipulation lend credence to the suggestion that bitcoin futures products were rushed to market. No word yet about the CBOE’s bitcoin futures product.

Matthew is a full-time staff writer for ETHNews with a passion for law and technology. In 2016, he graduated from Georgetown University where he studied international economics and music. Matthew enjoys biking and listening to podcasts. He lives in Los Angeles and holds no value in any cryptocurrencies.

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