Billionaire investor, crypto bull and former hedge fund manager Mike Novogratz has welcomed the recent probe by the US Department of Justice (DOJ) into potential bitcoin trading manipulation. The outspoken cryptocurrency bull, who has recently founded a digital currency merchant bank Galaxy Digital, praised the move, saying that while it might cause some panic initially, it will benefit the nascent industry in long-term.

Speaking to Bloomberg, Mr. Novogratz claimed that, “Weeding out the bad actors is a good thing, not a bad thing for the health of the market. Plenty of exchanges have these inflated volume numbers to create some sense of excitement around coins.“

A similar sentiment was echoed by other big names within the crypto industry, as Cameron Winklevoss, co-founder of the Gemini exchange claimed that, “We welcome any inquiry that serves to foster rules-based marketplaces and deter bad actors.“

Chief of Fundstrat Global Advisors Tom Lee went on to add that, “This is really welcome news ultimately because this means there is adult supervision coming/here.“

While many crypto aficionados are against the increased regulatory interference, numerous companies and traders have been craving for it for quite a while. Regulatory absence is usually mentioned as the biggest reason, hindering the institutional player entry into the crypto sphere.

Increased clarity and transparency would likely mean an influx of institutional funds, which can only be considered a positive for the digital currency markets that have been going through a rough patch recently. Bitcoin price tanked even further, once the news about the investigation came out and slipped to as low as $7267 before somewhat rebounding to trade around $7520 at press time.

Toshi Times has yesterday reported that DOJ has announced its plans to work alongside the Commodities and Futures Trading Commission (CFTC) to reveal the illegal trading strategies that have suspectedly been used to manipulate the crypto markets, namely its two biggest components – bitcoin and ethereum. The investigation is said to be in its early stages.

The regulators suspect that suspected bad actors used strategies known as ‘spoofing’, wherein traders register a bunch of false trade orders in order to deceive others, and ‘wash trading’, which is buying and selling among a certain group of traders to falsely heighten market activity and lure others into the market.

There have been allegations from some market participants that crypto manipulation is widespread with trader Sylvain Ribes claiming earlier this year that more than $3 billion of all crypto volume is fabricated, after analyzing order books of exchanges.

The infamous blogger ‘Bitfinex’ed’ documented the actions of unknown trader group, dubbed Spoofy, which was likely influencing the bitcoin price movement by placing larger orders of up to $2 million and never executing them.

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