A report has appeared in which several big cryptocurrency exchanges have been found faking trading volumes.
The report was made by the Blockchain Transparency Institute (BTI), whose stated mission in this research was to “provide better transparency for the crypto sphere on true exchange volumes.”
BTI’s report implicates several top 100 exchanges as previously listed on Coinmarketcap, whose rankings do not include research or findings on fake trading numbers. Those that it implicates include: BiBox, ZB, Bit-Z and LBank.
These exchanges are excused of using “wash trading”—putting up buy orders that correspond exactly with sell orders to influence the total $ of coins traded using the exchange. The boost in volume raises the exchange’s listing on CMC and also status in the crypto world. It, of course, disregards the ethical idea of transparent reporting on trading volumes. And, sadly, gives cryptocurrency trading a bad name.
This comes after the U.S. Securities and Exchange Commission refused another set of Bitcoin ETFs with findings of price manipulation by parties like large-scale exchanges. This report will certainly not help with that perception.
BTI utilized a formula to assess truer volumes and differentials in legit trading volume and what was reported. It explained the formula as such:
“The rankings begin with taking unique visitors per day figure and multiplying it by the percentage of unique access sessions which were entered directly in the address bar by the user and not accessed via a referral site or social media link. The total volume reported by the exchange is then divided by this number to determine a per visitor volume figure.”
If numbers are adjusted, Coinbase, the leading exchange in North America, jumps up to #3 in total volume traded across its platform. Binance and Bitfinex remain in the spots above it. Other big movers include Kucoin and Cryptopia, both moving into the top 25 from #58 and #90 respectively,
Due to the report, Coinmarketcap has changed the way it lists exchanges by volume; separating reported and adjusted volumes.
The full report can be found here; including examination of trading volume reports from exchanges not named in this article.