Poloniex To Use Market Monitoring Tools To Fight Pump & Dump
Circle, the Boston-headquartered FinTech startup backed by (among others) Goldman Sachs, has recently revealed it’s set to fight insider trading, ‘pump and dump’ schemes, and other forms of market manipulation through market surveillance tools.
Circle recently released a press release, announcing its partnership with Israeli software firm Nice Actimize. Nice is an Israeli software firm which expertise in creating financial tools to help its clients in monitoring financial crimes, risk, and compliance areas.
Nice Actimize will use its Cloud Markets Surveillance (CMS) service to detect practices that have negatively affected crypto trading activities over time. Initially, they will focus on insider trading schemes, pump and dumps, wash trading and layering.
The move comes less than a year after investigations revealed there were ‘pump groups’ using chat apps like Telegram and Discord to manipulate cryptocurrency markets, by artificially inflating the price of cryptos with low liquidity to then dump the tokens on new investors.
Circle is notably not the only crypto firm worried about market manipulation. Earlier this month it was revealed Nasdaq, the world’s second-largest stock exchange, was set to provide seven different crypto exchanges market surveillance technology.
Market manipulation is one of the biggest problems in the traditional stock market as well as the crypto trade market. The effect is more noticeable in the crypto space since the crypto market suffers from heavy price volatility, and lack of technical knowledge among the public also add to the cause.