Huobi and OKEx convicted of artificial …

Huobi and OKEx convicted of artificial …



Huobi and OKEx convicted of artificially inflating trade volumes

  • Major exchanges wind more than 98% of Ethereum (ETH) trading volume

  • Blockchain Research Lab Analysts Estimate True Volumes Based on Wallet Balances

  • FCoin, Huboi and OKEx appear to be corrupting data

International consortium of news organizations, developing standards for transparency.

Major cryptocurrency exchanges appear to misrepresent up to 98% of the published Ethereum (ETH) trading volume. These are the conclusions reached by experts from Blockchain Research Lab. What exchanges can you trust??

The analysis of transactions showed a surprisingly large number of so-called “laundering transactions”, that is, those in which there is no actual movement of value, but the volume of trade increases..

In the study, exchanges are divided into three groups: fair volume, potentially inflated volume, and proven volume inflated.

Huobi and OKEx convicted of artificial ...

It should be noted that it is beneficial for exchanges to show high trading volumes, since this promotes services such as CoinGecko and CoinMarketCap from the top in the ratings. And the higher the rating, the more traffic. CoinMarketCap uses a proprietary algorithm to check the validity and reliability of published trade volumes and liquidity.

On some exchanges, unscrupulous participants may place fake orders. If such accounts belong to the exchange itself, its trading volumes artificially increase along with liquidity..

Who lies

In the first category, experts have identified honest exchanges. This includes Bitfinex, Bistamp, Bittrex, Kraken and Poloniex.

The second category includes platforms with dubious results, with such giants as Binance and HitBC and smaller platforms like KuCoin and YoBit..

Among those who unambiguously inflate volumes were FCoin, Huobi and OKEx. Researchers used data from the “honest group” to scrutinize exchanges with fraudulent volumes.

Huobi and OKEx convicted of artificial ...

Blockchain Research Lab relied on metrics such as published trading volume, account balances, wallet counts, and web traffic to determine how much volume was generated by flushing trading. They based their conclusions on volumes for BTC, ETH, XRP, USDT and USD.

The average daily trading volume in the BTC / USD pair for exchanges from the first “fair” group was about $ 42 million. The second group already reported volumes in the region of $ 170 million, and the third group announced almost $ 500 million..

Coinmarketcap Shows Different Confidence In Different Markets | Source:

The ratio of trade volumes to actual page views in the third group was 138 times higher than in the first. In addition, the ratio of ETH trading volumes to account balances in the last two groups was significantly higher than in the first..

Based on this data. analysts have calculated the estimated trading volume for the second group. It turned out to be 50% lower than the stated.

Meanwhile, the sites, which, according to the researchers, falsified the data, overestimated the values ​​by 96-98%. An analysis of token balances versus trading volume also showed that 72-97% of the volume could have been falsified..

With all the wealth of choice

This is not the first time analysts have come to such conclusions. In July, CoinMetrics published its own research that assessed the reliability of official trade volume data. In this document, the firm determined only about a dozen of the published reliable volumes of exchanges..

Huobi and OKEx convicted of artificial ...

Last year, Forbes magazine wrote that Bitcoin flush trading reaches 95% of the total. Gavin Brown, Senior Lecturer in Financial Economics at Manchester Metropolitan University, told Forbes:

“Most exchanges are not regulated. Thus, they can publish fictitious volumes without any legal consequences ”.

In addition to these indicators, stablecoins account for at least $ 11 billion of the entire cryptocurrency market. Accounts can easily run stablecoins back and forth to increase volume. Some exchanges run competitions where users are rewarded for higher trading volumes, regardless of prices.

The freedom that allows crypto traders to escape the watchful eye of regulators can be a double-edged sword. The risks of fake volumes require increased vigilance from users.


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