Crypto anger as investors claim insider trading in $600b Trump crash
The speculators most affected had used borrowed money to bet on price movements, in a process known as leveraged trading. Sharp declines in the prices of digital currencies resulted in crushing losses on these transactions as positions were wiped out.
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Cryptocurrencies have struggled to recover since Trump’s announcement, with Bitcoin still down 8.5 percent from Friday and Ethereum trading 12.8 percent lower. Dogecoin fell 26.3 percent.
The US president’s unexpected tariff threat comes in retaliation for China’s decision announced just days ago to impose new export controls on its global supply of rare earths and critical minerals.
But Beijing appeared to soften its stance over the weekend, with some investment experts questioning whether the market sell-off was due to a brief geopolitical misunderstanding.
Meanwhile, the latest scrutiny comes after the Trump administration was also embroiled in insider trading allegations in April. Many Democrats called for an investigation after the President’s “Emancipation Day” tariffs announcement on April 2 caused stocks to tumble around the world, but quickly rebounded after the President announced the pause.
At the time, Democratic senator Elizabeth Warren wrote a letter to the Securities and Exchange Commission asking it to investigate whether Trump’s tariffs “enriched administration insiders and friends at the expense of the American public.”
Senior White House officials have repeatedly denied allegations of insider trading. This comes as global policymakers and finance ministers gather in Washington this week to attend the International Monetary Fund’s (IMF) autumn summit.
Concerns about the upcoming stock market correction caused by the AI bubble are expected to dominate the meetings.
IMF managing director Kristalina Georgieva warned ahead of the meetings on Wednesday that things could get ugly quickly, with the market carrying echoes of the dotcom bubble.
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“Valuations are heading towards levels we saw during the internet boom 25 years ago,” he said.
“If a sharp correction occurs, tighter financial conditions could drag down world growth, expose vulnerabilities and make life particularly difficult for developing countries.”
The Bank of England issued a similar warning last week, questioning whether technology stocks could withstand extremely high valuations. Those concerns are amplified as investors sell off shares on fears that the world’s biggest money managers’ focus on $3 trillion in private loans could cause trouble.
Telegraph, London
