Data Researchers from the BTI (Blockchain Transparency Institute) have revealed a new report which alleges that a bulk of the top 25 BTC trading pairs that were listed on CoinMarketCap (CMC) were due to obviously overblown false volumes. On the 13th of December, the data researcher’s report was issued in Blockchain Transparency Institute’s Exchange Volumes Report.
According to the report, “During this time, [Last three months, Ed. Note] we have spent countless hours watching order books, analyzing volume data points, and speaking with market makers, high-frequency traders, and trade surveillance consultants. We have collected an enormous amount of data and we now feel confident to begin releasing these figures.”
Furthermore, the data researchers pronounced that they found four separate bot tactics utilized by the exchanges to bloat their exchange volume. As the report states, “Most of these pairs actual volume is under 1% of their reported volume on CMC. We noted only 2 out of the top 25 pairs not to grossly wash trading their volume, Binance and Bitfinex.”
What Is Wash Trading?
This is the name given to the process where a bot or a trader falsely inflates volumes by buying and selling an asset thus, providing deceptive information to the marketplace.
Wash Trading Participants
Some high-profile cryptocurrency exchanges are allegedly believed to have participated in wash trading and the list comprise HitBTC, OKEX, HUOBI, Bithumb and many more.
According to the report, The Blockchain Transparency Institute have updated their Advisory List of exchanges suspected of wash trading activities.
“[…] with over 50 exchanges wash trading over 95% of their volumes, this is a 500K a year scheme, with some exchanges making over one million dollars this year just from collecting these fees […] Many of these exchanges exist solely to collect these fees while their bots run their exchanges. We also have data on fair listing fee costs for exchanges which are not using wash trading bots. We’ve had reports on fees ranging from 2 BTC up to 75 BTC.”