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Cryptocurrency flash crash draws scrutiny from watchdog
By Lily Katz and Matt Robinson
Bloomberg News
Monday, October 2, 2017
A popular digital-coin exchange is drawing scrutiny from U.S. regulators over a June flash crash that erased most of the value in the second-largest cryptocurrency before traders had time to blink their eyes.
The Commodity Futures Trading Commission has requested information from Coinbase Inc. about a June 21 incident on its GDAX platform in which the ether digital token suffered a precipitous drop, falling to 10 cents from $317.81 in milliseconds before quickly recovering, said two people familiar with the matter.
Among the issues the agency is focused on is what role leverage might have played in the plunge, as Coinbase allowed traders to use borrowed money to make bigger wagers than would have otherwise been possible, said the people, who asked not to be named because the review isn’t public.
The CFTC inquiry is the latest sign that federal authorities are growing worried about a market with scattershot oversight that has attracted big money. Coinbase, which says it has served 10.6 million customers and facilitated $20 billion in digital currency transactions, is regulated by various states through a patchwork system. ...
... For the remainder of the report:
https://www.bloomberg.com/news/articles/2017-10-02/cryptocurrency-flash-...
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