The United States Department of Justice opened a criminal probe today looking into the possibility that traders have been manipulating the price of bitcoin, the world’s most popular cryptocurrency, and other cryptographic token currencies.

According to a report from Bloomberg, the investigation will proceed in coordination with the Commodity Futures Trading Commission, a financial regulator that oversees derivatives tied to bitcoin.

The probe would examine criminal practices in the bitcoin market looking for manipulative practices such as spoofing, or flooding the market with fake orders to change prices. Another type of manipulation investigators are looking for is called “wash trades,” where a trader exchanges with themselves to produce the illusion of market demand.

This investigation is in addition to the Securities and Exchange Commission’s probe into what initial coin offerings, the practice of selling cryptographic tokens by blockchain-related startups as a sort of crowdfunded investment.

When it comes to criminal activity and potential market manipulation, bitcoin has a problematic and risky history. Early bitcoin trading was fraught with a certain amount of danger, with few cryptocurrency exchanges available, and saw the extremely popular Mt. Gox go under in 2014 after the massive theft of an estimated $500 million in bitcoin at the time.

Since then, bitcoin users have lost numerous coins through the hacks of other exchanges, phishing scams and shady startups. Bitstamp Ltd., bitcoin exchange, lost $5 million in a hack. Bitfinex Inc., another exchange, lost $65.5 million worth of bitcoin. NiceHash, a bitcoin mining marketplace, lost $68 million. And those are just a few of the examples.

The theft at Mt. Gox also led to a dramatic plunge in bitcoin market value, from almost $1,000 to below $500 per coin. The exchange represented almost 70 percent of all bitcoin trades at the time. Mark Karpeles, then chief executive of Mt. Gox, was arrested by Japanese authorities out of suspicion that he had embezzled funds and manipulated data, potentially as part of the theft. The case is still in court today.

What’s more, a recent report released by the Anti-Phishing Working Group estimated that criminals have stolen about $1.2 billion in various cryptocurrency tokens since the beginning of 2017.

Aside from the marketplaces becoming victims of hacks, bitcoin exchanges themselves oftentimes come under skepticism about the behavior of traders. This is of concern to the DOJ as part of this probe. Investigators believe that exchanges may not do enough to stop potential market manipulation.

In past years, exchanges with low or no fees would show giant volumes of trade. However, much of that would prove to be potentially fake. As a result, some price aggregators would refuse to list particular exchanges for these questionable practices. Trader and investor Sylvain Ribes called this “fake volume” in an essay he wrote on Medium after doing research on the liquidity of cryptocurrency assets.

“When I set out to datamine for this piece, I had no idea I would end up talking about fake volume,” Ribes wrote.

What he found was that one particular exchange, OKEx, founded in 2014 by OKCoin Chief Executive Officer Star Xu and based out of Hong Kong, represented the top exchange by volume of trades in May. However, Ribes found that over 93 percent of all trades to be nonexistent. At the end of his research, Ribes concluded that more than $3 billion of daily volume in trades of cryptocurrency could be fictional, possibly more.

“Yet somehow, the practice is, if not encouraged, at least thoroughly ignored by popular data aggregators and most of their users,” Ribes said about his discovery, “when all anybody really has to do is have a look to figure out that something is amiss.”

Although bitcoin trading has been a niche market for many years, the sudden skyrocketing of its market value in recent years has brought it more mainstream attention. The currency started at near $1,000 in 2017 and then the price jumped significantly to near $20,000 by the end of the year. It has since crashed back down to below $8,000 today.

Bloomberg reported that DOJ investigators believe these fluctuations alone make the market a risky venture for anyone attempting to invest in the currency and, because of bitcoin’s rise in popularity, many people may be getting in without fully understanding the risks.

So far, the regulation of cryptocurrency exchanges within the U.S. has been somewhat minimal, the biggest exception being New York’s “BitLicense” regulation enacted by the New York Department of Financial Services in 2015. Since then, a few U.S.-based exchanges have signed up to be licensed in New York, including payments company Circle Internet Financial Limited, cryptocurrency developer Ripple Labs and bitcoin wallet and exchange Coinbase Inc.

The investigation by the USDOJ is said to still be in its early stages but may represent the next wave of potential regulation of bitcoin and cryptocurrency exchanges in the U.S.

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