Illegal trade: TerraExchange LLC pre-arranged a transaction involving bitcoins to test its systems.
A New Jersey-based bitcoin swap trading platform was sanctioned by US derivatives regulators after it allegedly facilitated illegal wash trades (a form of manipulation) and then misled US regulators both through press releases and at a government-sponsored public meeting.
The Commodity Futures Trading Commission said TerraExchange LLC pre-arranged the sale of a swap that derived its value from bitcoins for trading last October, in an effort to test its systems.
There were only two buyers authorised to trade it, and they each bought the swap for the same size and amount, effectively offsetting each other in what is known as an illegal "wash trade."
Later, however, the trading platform attended a CFTC advisory committee meeting where it announced the trade was evidence of actual market interest, without disclosing the trade was pre-arranged. — Reuters
Limited time offer:
Just RM5 per month.
