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'' The self-regulatory organization FINRA and the North American Securities Administrators Association have issued investor alerts about bitcoin.177178
An official investigation into bitcoin dealers was reported in May 2018. The U.S. Justice Department launched an investigation into potential price manipulation, including the techniques of spoofing and wash trades.180181182 Traders in the U.S., the U.K, South Korea, and maybe other countries are being investigated. Brett Redfearn, head of the U.S.
The U.S. federal investigation was motivated by concerns of possible manipulation during futures settlement dates. The final settlement price of CME bitcoin futures is determined by costs on four exchanges, Bitstamp, Coinbase, itBit and Kraken. Following the initial shipping date in January 2018, the CME requested extensive detailed trading information however a few of the exchanges refused to supply it and later provided only limited information.
Academic research published in the Journal of Monetary Economics concluded that cost manipulation happened during the Mt Gox bitcoin theft and that the market 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 in the Bitfinex exchange account for about half of the price increase in bitcoin in late 2017.188189
J.L. van der Velde, CEO of both Bitfinex and Tether, denied the claims of price manipulation:"Bitfinex nor Tether is, or has , engaged in any sort of market or price manipulation. Tether issuances cannot be used to prop up the price of bitcoin or any other coin/token on Bitfinex. "190
The Bank for International Settlements summarized several criticisms of bitcoin in Chapter V of the 2018 annual report. The criticisms include the lack of equilibrium in bitcoin's cost, the high energy consumption, high and variable transactions costs, the bad security and fraud in cryptocurrency exchanges, vulnerability to debasement (from forking), and the influence of miners.191192193.
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 University known as bitcoin the"mother of all bubbles. "199 Central bankers, including former Federal Reserve Chairman Alan Greenspan,200 investors like Warren Buffett,201202 and George Soros203 have stated similar opinions, as have business executives like 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 though all miners utilized modern amenities, the combined electricity consumption would be 166.7 megawatts (1.46 terawatt-hours per year).133
In the end of 2017, the global bitcoin mining activity has been estimated to consume between one and four gigawatts of electricity.205 Politico noted that the even high-end quotes of bitcoin's total consumption levels amount to only about 6 percent of the total power consumed by the international banking sector, and even if bitcoin's consumption levels increased 100 fold from today's degrees, bitcoin's consumption would still only amount to about 2% of global power consumption.206.
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To lower the expenses, bitcoin miners have set up in places like Iceland where geothermal energy is cheap and cooling Arctic atmosphere is free.207 Bitcoin miners are known to utilize hydroelectric power in Tibet, Quebec, Washington (state), and Austria to decrease electricity prices.206208209210 Miners are attracted to suppliers like Hydro Quebec who have energy surpluses.211 According to a University of Cambridge study, much of bitcoin mining is done in China, where power has been subsidized by the government.212213.
Various journalists,207214 economists,215216 and the central bank of Estonia217 have view it voiced concerns which bitcoin is a Ponzi scheme. In 2013, Eric Posner, a law professor at the University of Chicago, said that"a true Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion. "218 A 2014 report from the World Bank concluded that bitcoin was not a willful Ponzi scheme.219:7 The Swiss Federal Council220:21 examined the concerns which bitcoin may be a pyramid scheme; it concluded that,"Since in the example of bitcoin the normal guarantees of gains are lacking, it cannot be assumed that bitcoin is a pyramid scheme." In July 2017, billionaire Howard Marks called bitcoin as a pyramid scheme.221.