Spoofing

Regulation of the crypto market isn't yet so strongly entrenched as the regulation of the traditional one, where for any kind of manipulation you can get an anal penalty in the form of a fine or an arrest. There are various ugly ways for the market manipulation: here we have the scandal with "Willy" and "Markis" bots, who were operating on the Mt.Gox exchange in 2014, or throwing up FUD news, so, in short, there are thousands of ways.

Right now let's talk about a technique called spoofing. Spoofing means creating immense orders with the aim to cause panic among people who are staring at the order glass of the exchange, and to move the price wherever you need. In honor of this kind of manipulation the nickname Spoofy was given to one Bitfinex trader, who was pumping bitcoin this summer placing his orders for $60 mil.

Spoofy placed massive buy orders for bitcoin at a price below all the other orders, and as soon as sale began, he canceled them. Such orders usually live for a few minutes or 5-10 seconds when manipulating to increase prices.

He makes large sell orders when it is necessary for the bitcoin price to go down or stop growth.

Sometimes Spoofy places orders far from the contract execution price, usually at $50-100. They exist for several hours. For example, when the price of bitcoin have been recovering and went above $2 thousand, Spoofy placed sell orders of approximately 4 thousand bitcoins at $1,900, which were never executed.

It is possible that the stock exchange itself draws such orders. And since the regulation of the crypto is just germinating, no one will examine that and no one will be  penalized. This is the downside of decentralization.