Price manipulation in the cryptocurrency market can take various forms. For instance, by orchestrating buy or sell orders on a specific coin simultaneously by over a hundred individuals, the market price can be artificially inflated or deflated. This manipulation aims to profit from derivatives such as futures options based on the manipulated coin.
The specific process of price manipulation fraud may unfold as follows:
Formation of Manipulation Group: Manipulators form groups through online forums, social media, or other communication channels to participate in price manipulation. These groups plan to execute buy or sell orders for a specific coin simultaneously.
Simultaneous Order Execution: Members of manipulation groups execute buy or sell orders simultaneously as planned. This results in a sudden surge in market trading volume due to the large-scale transactions.
Price Manipulation: Market prices are manipulated due to the large-scale transactions. If buy orders dominate, prices rise; if sell orders dominate, prices fall.
Profit Realization through Derivative Trading: Predicting price fluctuations resulting from market manipulation, individuals trade derivatives such as futures options based on the manipulated coin to profit.
To prevent such price manipulation fraud, exchanges and regulatory authorities must rigorously monitor the market and investigate suspicious trading behavior to take appropriate action. Additionally, market participants must actively cooperate to maintain legal and transparent trading practices.