I did not. I described canceling orders as no big deal. Spoofing is illegal and very much a big deal. Spoofing implies canceling but canceling does not imply spoofing.
In the example I gave, the spoofer's intent is to encourage people to cross the spread into their resting order to avoid paying the spread themselves.
On the other hand, say someone has been resting an order for a long time, for example to buy at 9 because they think that's a good price. Until the bid is at that price, they are unlikely to get executed so they'll keep the order regardless of their position. But maybe they have a large long position on when the bid reaches 9, so they decide to cancel their order to prudently manage their risk by not buying more. This is obviously important in a healthy market -- firms that fail to manage their risk run the risk of cascading failures (if their clearing firm can't cover their losses.
It's pretty easy to tell one from the other most of the time, especially for regulators with access to account tagged data.
In the example I gave, the spoofer's intent is to encourage people to cross the spread into their resting order to avoid paying the spread themselves.
On the other hand, say someone has been resting an order for a long time, for example to buy at 9 because they think that's a good price. Until the bid is at that price, they are unlikely to get executed so they'll keep the order regardless of their position. But maybe they have a large long position on when the bid reaches 9, so they decide to cancel their order to prudently manage their risk by not buying more. This is obviously important in a healthy market -- firms that fail to manage their risk run the risk of cascading failures (if their clearing firm can't cover their losses.
It's pretty easy to tell one from the other most of the time, especially for regulators with access to account tagged data.