A few hours ago, TokenInsight published new research on wash trading which, in the last month, has continued to spread.
TokenInsight has analysed a variety of exchanges to check whether they are using this legally unsound technique.
Wash trading is a market manipulation technique whereby platforms simultaneously sell and buy large amounts of cryptocurrency and thus increase trading volumes, appearing to the public as a valuable platform where there is a lot of activity and liquidity.
This research has analysed as many as 24 exchanges, of which only 4 appear sincere in declaring the true volumes of their platforms; 10 exchanges have forged their volumes up to 70%, while the remaining 10 have faked less than 50%:
- 90% of real volumes – Coinbase Pro, Poloniex, Gemini and Bitstamp;
- 70% of fake volumes – HitBTC, EXMO, MXC, Biki, Bgogo, Bibox, DragonEx, LBank, CoinEgg and CoinMex;
- < 50% fake volumes – Binance, Bitfinex, Bittrex, BitMax, DigiFinex, Gate.io, Huobi Global, KuCoin, OKEx and ZB.
This is the overview that emerged from the research, thus a very worrying scenario, considering that only 4.5% of the analysed exchanges were honest.
The figures calculated are difficult to separate from the real users who trade normally on the platform, and it is also necessary to take into account trading bots, widely used by investors.
Furthermore, according to the report, exchanges are always using new methods to alter the volumes, which complicates monitoring and also deceives those who perform the tests because the platforms have learned to mask wash trading.
This, perhaps, is one of the reasons why decentralised exchanges (DEX) are becoming increasingly popular since everything is managed in a transparent way.
