The probe comes as digital currencies like Bitcoin have been making inroads into the real estate market
Federal investigators have opened a criminal probe into whether traders are manipulating the price of cryptocurrencies, just as the real estate industry has begun experimenting with Bitcoin and others.
The Department of Justice is focusing its probe on illegal practices that can influence the prices of currencies like Bitcoin, according to Bloomberg. That includes “spoofing,” or flooding the market with fake orders to goad other traders into buying or selling and “wash trading.” Wash trading involves a trader trading with himself to encourage others.
The DOJ is working with the Commodity Futures Trading Commission in the investigation. The Security and Exchange Commission is already conducting a probe and has issued dozens of subpoenas to people in the cryptocurrency industry.
For now, there are almost no regulations in place for buying and selling digital currencies, which some skeptics say leaves them vulnerable to manipulation.
Cryptocurrencies and other digital assets have begun making inroads into the world of commercial and residential real estate, but it is slow going. An El Segundo-based company called Aperture Real Estate Ventures launched a digital coin tied to its property-flipping business, which it says gives investors a chance to get in on profits from house-flipping led by industry veterans.
A handful of sales involving cryptocurrencies have also been recorded in Los Angeles and Miami.
In March, the sale of two Upper East Side condominiums in involving Bitcoin is believed to be the first real estate transaction in New York City using cryptocurrency. The seller, Magnum Real Estate Group’s Ben Shaoul, was said to have converted the digital currency into cash through BitPay.