The investigation surrounds the practice of spoofing — where an investor places orders that are intended to manipulate the price of an instrument — and flooding the market with fake orders, the report said Thursday, citing four unnamed people familiar with the probe.
Federal prosecutors are also working with the Commodity Futures Trading Commission, it added.
The price of bitcoin fell on the news to $7,339, and was down more than 6 percent, according to bitcoin exchange Coinbase.
Volatility in the cryptocurrency market has led to scrutiny from authorities around the world, who are scrambling to figure out ways to clamp down on speculative trading and illegal activities.
The Department of Justice declined to comment when contacted by CNBC.
You can read the full report by Bloomberg here.