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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 may have elevated rates of fraud, and that investors might be solicited on social networking sites.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 both issued investor alarms about bitcoin.177178
An official investigation into bitcoin traders was reported in May 2018. The U.S. Justice Department launched an investigation into possible price manipulation, including the techniques of spoofing and wash trades.180181182 Traders in the U.S., the U.K, South Korea, and possibly 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 possible manipulation during futures settlement dates. The final settlement price of CME bitcoin futures contract is determined by prices on four exchanges, Bitstamp, Coinbase, itBit and Kraken. Following the initial delivery date in January 2018, the CME requested extensive detailed trading information but a few of the exchanges refused to provide it and later provided only limited information.
State and provincial securities regulators, coordinated throughout the North American Securities Administrators Association, are investigating"bitcoin scams" and ICOs in 40 jurisdictions.185
Academic study published in the Journal of Monetary Economics concluded that cost manipulation happened during the Mt Gox bitcoin theft and that the marketplace remains vulnerable to manipulation.186 The history of hacks, fraud and theft involving bitcoin dates back to 2011.187
Research by John M. Griffin and Amin Shams in 2018 indicates that trading associated with increases in the amount of the Tether cryptocurrency and related trading at the Bitfinex exchange account for roughly half of the price increase in bitcoin in late 2017.188189
J.L. van der Velde, CEO of Bitfinex and Tether, denied the claims of price manipulation:"Bitfinex nor Tether is, or has , engaged in any kind of market or price manipulation. Tether issuances cannot be used to prop up the amount of bitcoin or any other coin/token on Bitfinex. "190
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The Bank for International Settlements summarized several criticisms of bitcoin in Chapter V of their 2018 annual report. The criticisms include the lack of stability in bitcoin's price, the high energy consumption, high and variable transactions costs, the poor security and fraud at cryptocurrency exchanges, vulnerability to debasement (from forking), and also the influence of miners.191192193.
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The Economist wrote in 2015 that these criticisms view are unfair, predominantly since the unethical image may induce users to overlook the capacities of the 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 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 Recommended Site University known as bitcoin the"mother of all bubbles. "199 Central bankers, including former Federal Reserve Chairman Alan Greenspan,200 investors such as Warren Buffett,201202 and George Soros203 have stated similar opinions, as have business executives such as 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 utilized modern amenities, the combined electricity consumption would be 166.7 megawatts (1.46 terawatt-hours annually ).133
In the end of 2017, the global bitcoin mining activity was estimated to consume between one and four gigawatts of electricity.205 Politico noted that the even high-end quotes of bitcoin's overall consumption levels amount to only about 6 percent of the total power consumed by the global banking sector, and even if bitcoin's consumption levels increased 100 fold from the current levels, bitcoin's consumption would still only amount to about 2% of international power consumption.206.
To lower the expenses, bitcoin miners have put up in areas like Iceland where view it now geothermal energy is economical and cooling Arctic atmosphere is liberated.207 Bitcoin miners are known to use hydroelectric power in Tibet, Quebec, Washington (state), and Austria to decrease electricity costs.206208209210 Miners are attracted to providers 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 is subsidized by the government.212213.