In case you may have missed it, last week Jamie Dimon, the CEO of JP Morgan made very disparaging comments about Bitcoin. He likened it to a “fraud” and a “bubble” that many people would lose money on.

No sooner did Jamie Dimon make those comments that the price of Bitcoin fell dramatically. Indeed, there were other market events that were also having an impact on the price, most notably the news out of China.

Yet, no one can dispute the impact that the words of a well-known banker such as Jamie Dimon will have on the market especially for buyers who are merely speculating. However, the impact that the comments had on the price were not the real controversy.

After the price of Bitcoin had fallen to a monthly low of $3,000, large buy orders for Bitcoin ETFs were put through on Swedish exchanges by one of JP Morgan’s businesses. On the face of it, that looks a great deal like market manipulation.

Indeed, this is also what a start up called Blockswater thinks. The managing partner, Florian Schweitzer, is not standing by as large banks profit on other’s misfortune.

Market Abuse Claims Filed

Blockswater laid the claims with the Swedish Financial Supervisor and stated that they believed that Dimon violated Article 12 of the European Union’s Market Abuse regulation (MAR) by the statements. Blockswater is a London based market-maker that does about $25m volume a month.

In the complaint, Blockswater claims that the statement by Dimon had a negative impact on the Cryptocurrency’s price and that the information that he was sharing was known to be false or misleading. They went on to say that

Jamie Dimon’s public assertions did not only affect the reputation of bitcoin, they harmed the interests of some of his own clients and many young businesses that are working hard to create a better financial system

The ETFs were traded through bitcoin derivatives for their clients. These are listed on the Stockholm based Nasdaq Nordic exchange and are termed the Bitcoin XBT bitcoin tracker fund. Although JP Morgan claims that these were only client trades, the Swedish regulator will have their say. It is worth noting that in the EU, the penalty for market manipulation is up to 2 years in jail.

Featured Image via Wikimedia

Posted by Editorial Team

Editors at large. Posting the latest news, reviews and analysis to hit the blockchain.