NEM President

NEM President Says Cryptocurrency Price Manipulation Is “Unavoidable”

NEM President: Crypto Price Manipulation Is “Unavoidable”

Lon Wong, President of Foundation Ltd, has stated that, “Price manipulation [of cryptocurrencies] is not something new”. While speaking to CNBC, the NEM president also said that regulators should develop a “coherent” regulatory framework to monitor the use of digital currencies. Furthermore, price manipulation of cryptocurrencies is neither a recent development nor something which is avoidable, according to Mr. Wong. This assertion seems to backed by several events that suggest the presence of market manipulation in not only the relatively small  crypto-market, but also in the more established traditional markets.

In an attempt to justify his statements, the NEM president then compared the emerging cryptocurrency market with the world’s much larger fiat-based financial system. He began his comparison by noting that price manipulation is prevalent in “mainstream markets” as well. Per the NEM executive, the crypto-community is in its “nascent, growing phase”. Therefore, it wouldn’t be unreasonable to consider these issues to be a type of growing pain.

Focus Should Be On Crypto-Technology

The NEM president predicts that price manipulation will become “a thing of the past” once the cryptocurrency market has “matured” and stabilized. However, he adds that his organization prefers to focus on improving and further developing its technology rather than concerning itself with prices. During his detailed discussion with CNBC, Mr. Wong appeared to be addressing concerns cited by crypto investors about market prices being manipulated by large digital currency exchanges such as Bitfinex.

In fact, as reported earlier by Core Media, Bitfinex was subpoenaed by the  U.S. Commodity Futures Trading Commission (CFTC) back in December 2017. Although specifics regarding exactly what information the CFTC had requested have not be confirmed, but there’s a fair chance it could be something related to price manipulation. Notably, these comments from the NEM president have come just a few weeks after $534 million worth of NEM tokens were stolen during a major hack of Japan’s Coincheck crypto-exchange.

Regulators Have A Lot To Learn

Arguably the most noteworthy comment from the NEM president was that regulators don’t know enough about cryptocurrencies. Therefore, Mr. Wong thinks they are not yet capable of effectively regulating virtual currencies, particularly the centralized crypto-exchanges. Despite regulator’s lack of adequate knowledge and experience about the crypto-market and its underlying technology, he believes that “both sides of the divide, the exchanges and the regulators, [will come] together worldwide and [come] to a conclusion about how to get to the next step”.

Given the current state of the global cryptocurrency market and all the different ways regulators have reacted to this new development, it seems unlikely that authorities worldwide will come to some sort of join consensus on how to deal with cryptocurrencies. It’s also worth noting that Mr. Wong’s prediction about price manipulation exiting the crypto-market once it matures is also unlikely. That’s because there are strong indications that price manipulation still goes on in the traditional and highly regulated financial system. So it seems illogical to assume that there won’t be any manipulation in the crypto-market, even if stabilizes.

Although we might not necessarily agree with everything the NEM president says, it’s always good to know what the major players in the crypto-world are thinking.