An investor who made millions from Donald Trump’s crypto crash has reignited claims of insider trading by lodging a fresh bet against Bitcoin.
An account tied to an anonymous trader has invested $160m (£120m) in a so-called short against the world’s biggest cryptocurrency, betting it will fall.
The initially trade was made around two hours before Mr Trump took to social media to cool tensions with China on Sunday. The account continued to add to their position on Monday morning.
It comes just days after the same trader made $200m by correctly predicting a downturn in the crypto market, staking the trade just 30 minutes before the US President sent prices tumbling by threatening 100pc tariffs on China.
The timing of his short position sparked allegations of insider trading in the crypto community, with some questioning whether the trader had been privy to insider information from the White House.
There has been heightened scrutiny of the crypto market ever since Mr Trump reignited America’s trade war with China, which sparked one of the biggest ever crashes in the value of digital currencies.
Joshua de Vos, of CoinDesk, an industry data provider and publication, said: “The timing and scale of the positions opened on October 10, immediately prior to the market-wide liquidation, does raise suspicion of information asymmetry.”
He added: “While there is no conclusive evidence of insider trading, the wallet activity shows strong, directional conviction.”
In the US, insider trading carries a maximum fine of $5m and 20 years in prison. However, it is harder to prove and prosecute in the lightly-regulated cryptocurrency market.
Cryptocurrencies have yet to fully recover, with Bitcoin down by 5.5pc on Friday, while Ethereum is trading 5pc lower.
That is despite the market regaining some ground in the wake of Mr Trump’s olive branch to China on Sunday.
In a social media post, he said: “The USA wants to help China, not hurt it.”
Binance, the world’s largest cryptocurrency exchange, said it would refund some investors up to $283m following Friday’s volatility.
Binance admitted “technical glitches” hit some of its cryptocurrency products, blaming the “extreme market downturn”.
The offshore trading giant, which is banned from operating in the UK, added that it was continuing to investigate Friday’s price crashes and would report any suspected signs of market manipulation.
The US president’s latest tariffs threat was in retaliation to China’s decision to introduce new export controls on global supplies of rare earths and critical minerals, which was announced just days earlier.
However, Beijing appeared to have softened its stance over the weekend, with some investment experts questioning whether the market sell-off was triggered by a brief geopolitical misunderstanding.
Meanwhile, the latest bout of scrutiny comes after Mr Trump’s administration was also caught up in claims of insider trading back in April.
Several Democrats called for an inquiry after the president’s “liberation day” tariffs announcement on April 2 sent stocks plunging around the world, only to swiftly recover after Mr Trump announced a pause.
At the time, Elizabeth Warren, a Democratic senator, wrote a letter to the Securities and Exchange Commission urging it to investigate whether Mr Trump’s tariffs about-turn had “enriched administration insiders and friends at the expense of the American public”.
Senior White House officials have repeatedly denied claims of insider trading.
It comes as global policymakers and finance ministers gather in Washington this week to attend the International Monetary Fund (IMF) autumn summit.
Worries about a looming stock market correction sparked by an AI bubble are expected to dominate at the meetings.
Kristalina Georgieva, the IMF managing director, warned on Wednesday ahead of the meetings that things could get ugly quickly, with the market bearing echoes of the dotcom bubble.
She said: “Valuations are heading toward levels we saw during the bullishness about the internet 25 years ago.
“If a sharp correction were to occur, tighter financial conditions could drag down world growth, expose vulnerabilities, and make life especially tough for developing countries.”
The Bank of England also issued a similar warning last week, questioning whether tech stocks could live up to extremely high valuations.
The Financial Stability Committee (FPC), its panel of policymakers tasked with identifying what could spark the next financial crisis, said: “On a number of measures, equity market valuations appear stretched – particularly for technology companies focused on artificial intelligence.”
It noted that the market share of the five most valuable firms on the blue-chip S&P 500 index is greater than at any point in 50 years, at near 30pc.
Such concerns are compounded by investors dumping shares in the world’s largest money managers over fears that their $3tn push into private credit is headed for trouble.