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'' The U.S. Securities and Exchange Commission has also issued warnings. A May 2014"Investor Alert" warned that investments involving bitcoin might have high rates of fraud, and that investors might be solicited on social networking websites.175 An earlier"Investor Alert" warned about the use of bitcoin in Ponzi schemes.176
The self-regulatory organization FINRA and the North American Securities Administrators Association have issued investor alerts about bitcoin.177178
An official investigation into bitcoin traders was reported in May 2018. The U.S. Justice Department launched an investigation into potential price manipulation, including the techniques of spoofing and wash trades.180181182 Dealers in the U.S., the U.K, South Korea, and maybe other countries are being investigated. Brett Redfearn, head of the U.S.
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The U.S. national investigation was prompted by concerns of potential manipulation during futures settlement dates. The final settlement price of CME bitcoin futures is determined by prices on four exchanges, Bitstamp, Coinbase, itBit and Kraken. Following the initial delivery date in January 2018, the CME asked extensive detailed trading information but a few of those exchanges refused to supply it and afterwards provided only limited information.
State and provincial securities regulators, coordinated through the North American Securities Administrators Association, are investigating"bitcoin scams" and ICOs in 40 jurisdictions.185
Academic research published in the Journal of Monetary Economics concluded that price manipulation happened during the Mt Gox bitcoin theft and the marketplace remains vulnerable to manipulation.186 The history of hacks, fraud and fraud involving bitcoin dates back to at least 2011.187
Research by John M. Griffin and Amin Shams in 2018 indicates that trading related to increases in the amount of the Tether cryptocurrency and associated trading in the Bitfinex exchange account for roughly half of the purchase price increase in bitcoin in overdue 2017.188189
J.L. van der Velde, CEO of Bitfinex and Tether, denied that the claims of price manipulation:"Bitfinex nor Tether is, or has ever, engaged in any kind of market or cost manipulation. Tether issuances cannot be used to prop up the price of bitcoin or any other coin/token on Bitfinex. "190
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The Bank for International Settlements outlined several criticisms of bitcoin in Chapter V of the 2018 annual report. The criticisms include the absence of equilibrium in bitcoin's price, the high energy consumption, high and variable transactions costs, the bad recommended you read security and fraud at cryptocurrency exchanges, vulnerability to debasement (from forking), and the influence of miners.191192193.
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The Economist wrote in 2015 these criticisms are unfair, predominantly because the unethical image may compel users to forget the capabilities of their blockchain technology, but also due to the fact that the volatility of bitcoin is changing in time.194
Bitcoin and other cryptocurrencies have been identified as economic bubbles by at least eight Nobel Memorial Prize in Economic Sciences laureates, including Robert Shiller,195 Joseph Stiglitz,196 and Richard Thaler.19713 Noted Keyensian economist Paul Krugman wrote in his New York Times column criticizing bitcoin, calling it a bubble and a fraud;198 and professor Nouriel Roubini of New York University called bitcoin that the"mother of all bubbles. "199 Central bankers, her explanation including former Federal Reserve Chairman Alan Greenspan,200 investors like Warren Buffett,201202 and George Soros203 have stated similar views, as have business executives like Jamie Dimon and Jack Ma.204.
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Bitcoin has been criticized for the amount of electricity consumed by mining. As of 2015update, The Economist estimated that even if all miners used modern amenities, the combined electricity consumption would be 166.7 megawatts (1.46 terawatt-hours annually ).133
At the end of 2017, the global bitcoin mining activity has been estimated to consume between one and four gigawatts of electricity.205 Politico noted that the even high-end quotes of bitcoin's total consumption levels amount to only approximately 6 percent of the total power consumed by the international banking sector, and even if bitcoin's consumption levels increased 100 fold from the current levels, bitcoin's consumption would still only amount to approximately 2% of global electricity consumption.206.
To reduce the costs, bitcoin miners have set up in areas like Iceland where renewable energy is cheap and cooling Arctic air is liberated.207 Bitcoin miners are known to utilize hydroelectric power in Tibet, Quebec, Washington (state), and Austria to reduce electricity prices.206208209210 Miners are drawn to suppliers like Hydro Quebec that have energy surpluses.211 According to a University of Cambridge study, a lot of bitcoin mining is done in China, where electricity has been subsidized by the government.212213.