The cryptocurrency trading bots are not new and not moving away. Manipulation in the digital currencies is truly a growing concern for the regulators nowadays. According to the co-founder and president of CoinList, Andy Bromberg, the bots are getting widespread in the crypto market during the present time. The bots are known for buying or selling the currencies appropriately while making financial gains for the owners.
New York Attorney General, Barbara Underwood highlighted the issue in September citing that the crypto exchanges were vulnerable to manipulation. Underwood’s statement claimed that the integrity of the cryptocurrency market comes at risk when any venue tolerates manipulative or abusive conduct. His research paper revealed that the digital currency traders are able to create bots for the purpose of manipulating prices or buy them over the Internet.
On the other hand, the managing partner of Virgil Capital, Stefan Qin runs automatic trading program termed bots. It reportedly uses its own bots to combat anti bots on several cryptocurrency exchanges worldwide. Qin, who runs the $80 million hedge fund firm, revealed that it has turned out to be a cat and mouse game with the enemy bots. Earlier this year, he revealed that his firm Virgil Capital had lost a good amount on ether trades mainly due to the bots. However, Virgil has altered some of its algorithms to ensure no loss is incurred due to bots.
“We’ve had to build in error-handling functions to check for hostile and potentially illegal activities,” Qin opined, as reported on Pymnts.com.
A recently published article by Wall Street Journal also announced the rampant manipulation in the cryptocurrency market by the use of trading bots. WSJ discussed the effects of using bots on the digital currency market in terms of manipulation due to the lack of regulation in the industry. It has also cited the experiences of Qin of Virgil Capital and New York Attorney General, Underwood.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]