In what may sound like a tale to doubt for many, most cryptocurrency exchangers may not be as chart-topping as they have claimed to be, as recent research has found them to be faking volumes.
Just a few days ago, the U.S. Securities and Exchange Commission (SEC) had rejected nine bitcoins exchange-traded fund (ETF). In three publications, the applications which were made by Direxion, Pro Shares, and Granite Shares were denied based on claims on price manipulations. This decision, which is to remain until further review, has come as a massive surprise to many.
This decision is coming after the Blockchain Technology Initiative (BTI) made a report that revealed some exchangers had been involved in faking their actual trading volumes.
A new method was used to determine the ranking of the exchangers, as BTI faulted the current metrics used by CoinMarkerCap as being “questionable”, even with the adjusted volume parameters. The new system, according to them, provides better transparency for the crypto sphere on correct exchange volume.
“We have discovered at least 7 of the top 10 exchanges engaging in excessive wash trading from 12x to over 100x their true volume. We have also highlighted more trustworthy exchanges which move up 40-60 places in the true rankings list”, the report stated.
At the end of the findings, the top 100 exchanges on the ranking had been disrupted, as a number of the toppers were found out as offenders. BiBox, ZB, Bit-Z, and LBank were all found culpable of faking their volumes. According to BTI, they do this by merely ‘wash-trading’ – they put up buy orders that correspond precisely with sell orders to influence the total worth of coins traded using the exchange. BiBox were found to have upped their volume by over 85x, Bit-Z to over 469x, ZB over 391x, LBank 4400x. Also found wanting is BCEX, who wash-traded at over 22,000x.
Reshuffling the table takes Binance, Bitfinex, and Coinbase to positions one, two and three on the chart respectively. Moving up the ladder also is Kucoin, and Cryptopia, who both moves into the first 25 from positions 58 and 90 respectively. To avoid future controversies, CoinMarketCap has made a distinction between Reported and Adjusted volumes in the ranking available on their website for top exchangers, as they try to prevent the lousy name wash-trading gives the trading world.