Zář 27

House of Cards? Trade Volume of Big Exchanges Questioned

Amid market turbulence and general cryptocurrency uncertainty, some speculate fast-growing exchanges may be manipulating — or outright lying about — their trade volumes.


Questions about inflated exchange volume have long plagued the cryptocurrency world.

Outcry is now intensifying as once-unknown exchanges are enjoying seemingly smashing success in the midst of market slowdowns and uncertainty.

Reporters from Bloomberg recently wrote about the curious case of the BitForex exchange. Once relegated to obscurity, the platform has now been busy reporting about days where transactions exceed $5 billion dollars.

BitForex Vice President Garret Jin said the trading surge was just due to its transaction mining system, a practice some say is just a set up to inflationary wash trading activity.

Overall trading volume across the industry is expected to grow by 50% in 2019, but some are starting to wave a red flag while scrutinizing the alleged astronomical growth of once-small exchanges.

Scattered discourse on this topic has swelled in the past few months as more people in the industry believe exchanges are dramatically overstating their trading volume. This is done by offering incentives to inflate, or by simply turning a blind eye to blatant abuse on exchange platforms.

Allegations Everywhere

Allegations about fake trading volume are certainly not new. Just a few days ago, the popular exchange Coinbase fired back at New York Attorney General Barbara D. Underwood regarding its trade volume.

Bitcoinist reported that Attorney General Underwood alleged Coinbase “[…] disclosed that almost twenty percent of executed volume on its platform was attributable to its own trading.” Coinbase Chief Policy Officer Mike Lempres wrote:

Coinbase does not trade for the benefit of the company on a proprietary basis

In a March Medium post, trader and investor Sylvian Ribes noted his belief that the volume of fabricated cryptoassets was more than $3 billion dollars.

Ribes specifically called out OKEx, claiming 94% of its volume was nonexistent after allegedly reviewing publicly available data.

Others like EverMarkets Exchange CEO Jim Bai, see the problem of fraudulent volumes as just an ecosystem immaturity issue, asserting how legitimate exchanges will eventually pop up that

Provide enough real, beneficial structural incentives so that people won’t be misled into trading on questionable venues.

A Secret Brought To Light?

In August, the Blockchain Transparency Institute released a sweeping report alleging that 70% of the top 100 exchanges on sites like CoinMarketCap are “likely engaging in wash trading by at least 3x their stated volume.”

There are people who see these types of shady trading practices an instance of “everyone’s doing it, so I’m doing it,” according to Neil Woodfine of Clavestone.

According to Woodfine and Eterna Capital’s Asim Ahmad, inflated volumes from exchanges are likely due to automatic high-frequency trading strategies — a practice that has been regarded as concerning by the New York Attorney General.

How big of an issue do you think exaggerated or fraudulent exchange trade volumes are? Let us know your thoughts in the comments below!


Images courtesy of Bitcoinist archives, Shutterstock.

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Srp 25

Over $6 Billion in Daily Trading Volume Faked Across Top 100 Exchanges

A new report found that over 70% of the top 100 exchanges on CoinMarketCap are engaging in excessive wash trading from three to thousands of times their stated volume.

[Note: This is a guest article submitted by researcher Marco Paez] 


Two-Thirds of 24 Hour Trade Volume May Be Fake

It’s been a month since CoinMarketCap (CMC) made changes to the way they post exchange volume stats after being called out by multiple sources for supporting bloated volume numbers. An adjusted volume metric was added to the site which changed up the rankings substantially, however, the new adjusted rankings still seemed to be suspect by many in the industry.

Released this week, research compiled by the Blockchain Transparency Institute (BTI) gives clearer insight into how massively overstated the daily volume numbers actually are. Tallying up the volume numbers of the top 130 exchanges, the report found that over $6 billion in daily trade volume is being faked, comprising over two-thirds of the total 24-hour trade volume.

Released this week, research compiled by the Blockchain Transparency Institute (BTI) gives clearer insight into how massively overstated the daily volume numbers actually are.

The largest offenders in the top 10 include Bibox, which appears to be wash trading their volume over 85x, Bit-Z to over 469x, ZB over 391x, LBank 4400x. The worst of the bunch is BCEX at over 22,000x.  All of these exchanges trail Binance in the daily unique visitor’s statistic between 50 and 600x.

The top exchange in the USA is Coinbase, which climbs the ranks up to #3. Another big mover into the top 10 is Bithumb at #4 which overtakes Upbit as the largest exchange in South Korea. Upbit is currently under investigation for fraud, money laundering, and wash trading which correlates with data showing an over-reporting of their volume by 11x.

Binance sits at the top of the chart at #1 with a massive amount of unique daily visitors to back them up.  Bitfinex slides into the number 2 spot behind their high dollar clientele and $10,000 minimum deposit for entry.

KuCoin, Cryptopia See Big Gains

A large chunk of the top 25 exchanges have dropped all the way out of the top 100. According to the data, these exchanges typically have less than 1,000 site visitors per day. The majority of these exchanges also seem to be mass produced, as they all appear to be using the same UI and trading engine.

Coinex, which was left out of CMC’s adjusted volume rankings due to transaction mining, finds itself inside the top 25 using this data. Other transaction mining exchanges such as Coinbene and Bit-Z dropped well outside of the top 25 exchanges from their previous rankings.

Kucoin and Cryptopia are the biggest movers-up the charts landing in at #19 and #24, and moving up from #58 and #90 respectively, after watching all the fake volume ahead of them disappear. Both of these sites have unique daily visitor counts in the top 10 of all exchanges. The BTI report notes that many of their customers are trading on low volume and low market cap coins, which keep them outside of the top 10.

The research team states they used data obtained from SimilarWeb on website traffic coupled with order book research conducted by Sylvain Ribes. His report detailed excessive slippage rates of top 15 exchanges including Okex, Huobi, Lbank, and Bit-Z. The combination of these data sets was plugged into a new formula which produced a vastly different top 25 than what is being reported. A rundown of their methodology for the rankings can be found here.

Data collected from SimilarWeb also reports many of these offender exchanges getting up to 90% of their referral volume from rankings pages, overwhelmingly from CMC. This naturally incentivizes wash trading by any exchange looking to move up the ranks.

When compared, the slippage data of the known respected exchanges and monthly traffic data appears to be in correlation. Binance, Coinbase, Bittrex, Bitfinex, Kraken, Poloniex, and Kucoin all have monthly visitor counts well above the rest of the top 100 exchanges as well as very low slippage when their order books were checked.

The report notes that although their data is reported with an accuracy of 1:1 this does not mean there is no wash trading going on, just that none could be proven using their current model.

The report notes that although their data is reported with an accuracy of 1:1 this does not mean there is no wash trading going on, just that none could be proven using their current model.

Lending credibility to these top exchanges, it was recently reported that Coinbase is building a new system to monitor suspicious trading activity known as the Coinbase Trade Surveillance Program. The system in place is one of the ways Coinbase says it is using to prepare for the $10 billion of institutional money waiting to move into the space.

Gemini also started a similar program in April when it partnered with Nasdaq to monitor its marketplace. Nasdaq’s SMARTS Market Surveillance technology is currently monitoring activity across all of Gemini’s trading pairs. Gemini moved up from #26 to #14 in the BTI rankings.

These types of initiatives continue to be implemented as the space matures in preparing the market for institutional investors. With more important ETF decisions looming this year, these exchanges seek to prove to the SEC that they’re doing due diligence in securing their platforms from manipulation.

BTI’s full rankings list of the top 130 exchanges can be found here.

What are your thoughts on misrepresented and overstated value among major exchanges? Let us know in the comments below!


Images courtesy of Shutterstock

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Led 25

PBOC to ‘Continue Focus’ on Exchanges as Volumes Plummet

· January 25, 2017 · 7:00 am

Bitcoin’s price dropped slightly after the People’s Bank of China (PBOC) published a summary of its findings after inspecting major Chinese exchanges.


PBoC: ‘Continued Focus’ on Exchange Activities

“According to the initial inspection and the problems found, the inspection group decided to continue to focus on payment and settlement, anti-money laundering, foreign exchange management, information and financial security and other aspects of further inspection,” the translated statement reads.

Investigators suggested that investors should pay attention to Bitcoin platform transactions, such as legal compliance, market volatility, financial security and other risks, careful participation in Bitcoin investment activities.

The Bitcoin price had remained largely unfazed as new Chinese exchange fees caused trading volumes to crash by over 90% in 24 hours.

Following reported criticism by a regulatory inspectorate last week, major Chinese exchanges BTCC, Okcoin and Huobi all implemented a 0.2% trading fee Monday to “curb manipulation and extreme volatility,” as BTCC described it.

The move hit China’s giant automated trading market, which had previously enjoyed zero-fee transactions.

Figures now show that for all three exchanges, trading has decreased in volume by roughly 90%.

Far from causing panic, many are suggesting the move will remove volatility from Bitcoin’s price for good, given that China’s toll-free environment had previously comprised up to 98% of trading.

While mainstream media attempted to spread its oft-quoted doom and gloom, BTCC COO Samson Mow said the publicity was simply “good for Bitcoin.”

Former Bitcoin Foundation Director Jon Matonis added that Chinese exchanges had effectively “taken one for the team,” however, echoing comments by a local Bitcoin hedge fund owner that they were “cutting off their aim to stay alive.”

Japan Overtakes China

Commentators on social media continued the positive speculation, citing “organic growth” and less manipulation making Bitcoin more appealing for wary investors in the long term.

These could potentially include instruments such as Bitcoin ETFs, the first of which has spent three years awaiting US regulatory approval and is still considered by analysts to have slim chances of slipping through the net.

Meanwhile, statistics are providing interesting reading in terms of how the Bitcoin trading landscape could look in the future. As Bitcoinist reported previously, Japan’s exchange scene had reached the number two spot prior to the Chinese drop, and volumes in the country are now topping global charts, beating even the US.

What do you think about the People’s Bank of China’s latest announcement and the impact of lower Chinese trading volumes? Let us know in the comments below!


Images courtesy of Shutterstock, Twitter

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Úno 29

LocalBitcoins Volume In South Africa Shows 50-fold Growth In One Year

Source: bitcoin

Bitcoinist_South Africa

The concept of Bitcoin has been attracting attention from all over the world in recent years. Digital currency provides a way to achieve financial freedom regardless of one’s location or access to existing services and platforms. South Africa seems to be taking a serious liking to Bitcoin in recent weeks, as the LocalBitcoins trading volume keeps spiking week over week.

Also read: London Bitcoin Forum – The Conference for Bitcoin & Blockchain Innovations – Kicks Off March 23rd

South Africa Goes Through Financial Turmoil

Historically speaking, the increase in trading volume on LocalBitcoins in South Africa has been taking place since April of 2015. Even though a small increase is nothing to make note of these days, the volume has been steadily increasing ever since that time. Or to be more precise, the LocalBitcoins volume has grown by almost 5,000 percent in the past eleven months.

Financial trouble has been brewing in South Africa for quite some time now, as the country has gone through no less than three different finance ministers in less than a week in December of 2015. Even though Pravin Gordhan had served as a finance minister from 2009 to 2014, his appointment at the end of 2015 was a drastic move to put investors’ minds at ease.

The previous finance ministers between the end of 2014 and December 2015 have been able to reign in state spending, which was a cause for great joy among South African citizens. However, the South African Rand fell to record lows during this same period, part of which could be blamed on the increasing USD value.

A weak Rand is creating financial instability in the country, forcing residents and investors to look for other options. Bitcoin seems to prevent the answer to the problem, as this popular digital currency is available to anyone in the world, without oversight from banks or governments.

However, obtaining Bitcoin can be a bit of a problem for novice users. Luckily, there are platforms like LocalBitcoins, which connects buyers and sellers of digital currency with each other. Unlike traditional Bitcoin exchanges, LocalBitcoins will not touch customer funds at any step along the way, as they just act as a platform to connect interested parties and create a reputation system for individual users.

LocalBitcoins Usage On The Rise

It should come as no surprise to find out the Bitcoin volume against the South African Rand is seeing a healthy boost on LocalBitcoins. The transaction volume has been increasing month over month since April of 2015, and business has seriously picked up as of November of last year. This surge in Bitcoin volume appeared around the same time the country when through three ministers of finance, so there might be a correlation there.

At the time of publication, LocalBitcoins reached a weekly volume of 12 million South African Rand in the past week. This is quite an increase compared to the last week of February in 2015, as the volume then was sitting at 251,254 Rand. To put this into numbers people can relate to, the LocalBitcoins volume in ZAR increased from US$16,624.66 per week to US$746,240.43 in less than one year.

What are your thoughts on this major LocalBitcoins trading volume in South Africa? Will this trend continue? Let us know in the comments below!

Source: Coin Dance

Images courtesy of LocalBitcoins, Shutterstock

The post LocalBitcoins Volume In South Africa Shows 50-fold Growth In One Year appeared first on Bitcoinist.net.

LocalBitcoins Volume In South Africa Shows 50-fold Growth In One Year

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