The December 2018 Exchange Volumes Report had been recently released by the Blockchain Transparency Institute (BTI). The report surprisingly states that among the top twenty-five digital coins, only two are actually informing the accurate trade volume. The two honest exchanges are namely Bitfinex and Binance. The others inflate their volume by including themselves in the wash trading which of course provides flawed information.
The BTI reports particularly concentrate on web traffic to scrutinize and include data collected from exchanges on mobile app usage and API trading.
Wash Trading evidences found by BTI
On finding evidence of wash trading by most of the exchanges, the BTI report states:
“For our December report, we’ve taken a deeper dive into specific trading pairs on exchanged which are showin\ng clear evidence of wash trading. This has always been our goal, however, we wanted to make sure this data was as accurate as possible, so we’ve been updating and perfecting these algorithms over the past three months.
During this time, we have spent countless hours watching order books, analyzing volume data points, and speaking with 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…
Included in this report, we have calculated the true volume of the CMC top 25 BTC trading pairs. Most of these pairs actual volume is under 1% of their reported volume on CMC. We noted only two out of top 25 pairs not to be grossly wash trading their volume, Binance and Bitfinex.”
BTI has also provided a screenshot to prove their argument.
Here is a summary if the BTI report that highlights the following:
- BTI finds out that 4 different bot strategies are made use of to inflate the exchange volume numbers. These bots are moved accordingly at different trading pairs depending on the time if the day. The settings are made to change according to the current volume trends and hype volume for one specific token.
- All of the top 25 Bitcoin trading pairs on Coinmarketcap is thriving under 1% of their declared volume.
- Bitfinex and Binance exchanges are currently refraining from practising wash trading.
- Top 30 tokens from OKEx are involved grossly in wash trading. OKEx had been said to be benefited the most from referral traffic of Coinmarketcap. Nevertheless, after retaining the actual volume, it still positions itself in the top 10.
- Huobi too is wash trading.
- Monero, Dash, Bitcoin Gold and ZCash are being washed by Bitthumb making them fluctuate every month.
- Listing fees with the average spending over $50,000 are big business.
- A compilation by BTI on the advisory list of exchanges can be found in the report which is suspected to wash trade and benefit from the listing fees unethically, reports BTI
Concluding statement on Wash Trading
BTI makes a comprehensive conclusion about wash trading activities.
“Based on this data over 80% of the CMC top 25 BTC pairs volume is wash traded. These exchanges continue to use these strategies as a business model to steal money from aspiring token projects.
Advice to the Projects Planning
BTI report suggests the projects planning to get their tokens listed on exchanges.
” We advise any token project to contact us regarding any exchange requesting large listing feed, especially those on our Advisory List.
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 2BTC up to 75BTC.”