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BTI Report: Only Binance and Bitfinex Exchanges Are Not Falsifying Trade Volume Data

The Blockchain Transparency Institute (BTI), has released its December 2018 Exchange Volumes Report. The report goes on to state taht only two out of twenty five top cryptocurrency exchanges are actually reporting accurate trade volume. These two exchanges are Bitfinex and Binance. The rest of the exchanges are involved in wash trading that inflates their trade volume figures thus providing inaccurate information.

Evidence of Wash Trading By Some Exchanges

The report also claims that there is clear evidence of wash trading by majority of the exchanges. It states:

For our December report we’ve taken a deeper dive into specific trading pairs on exchanges which are showing 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 3 months.

During this time, we have spent countless hours watching order books, analyzing volume data points, and speaking with market 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 2 out of the top 25 pairs not to be grossly wash trading their volume, Binance and Bitfinex.

Wash Trading is a form of market manipulation in which an investor simultaneously sells and buys the same financial instruments to create misleading, artificial activity in the marketplace.

Below is a screenshot from the report showing which exchanges are practicing wash trading.

Summary of the Report by BTI

The report has highlighted the following:

  • 4 different bot strategies are used to inflate exchange volume numbers. These bots are set at different trading pairs depending on the time of day. Settings are constantly changed based on current volume trends and hype around a specific token
  • The top 25 Bitcoin trading pairs on Coinmarket Cap is under 1% of their reported volume
  • Only Bitfinex and Binance exchanges are not practicing wash trading
  • OKEx’s top 30 tokens are engaged in wash trading. The exchange has benefited the most from Coinmarket Cap’s referral traffic. By adjusting the volume of OKEx, the exchange still manages to be in the top 10 according to trade volume
  • Huobi is also wash trading its top 25 pairs but to a lesser degree than OKEx
  • HitBTC is wash trading its top 25 pairs
  • Bithumb is wash trading Monero, Dash, Bitcoin Gold, and ZCash. Wash traded tokens on Bithumb appear to change depending on the month
  • Listing fees are big business with the average project spending over $50,000 to get listed
  • The team at BTI has compiled an advisory list of exchanges that they believe are wash trading and benefiting from listing fees. The list can be found here

Conclusion on Wash Trading

The report concludes the following about the 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 Projects Planning on Finding an Exchange to List their Tokens

The report has also offered the following advice to projects planning to have their tokens listed on exchanges:

We advise any token project to contact us regarding any exchange requesting large listing fees, 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.

Methodology of the BTI Reports

The BTI reports have evolved from simply focusing on web traffic, to now include data collected from exchanges on mobile app usage and API trading. For the December report, the team at BTI has also explored specific trading pairs on exchanges.

What are your thoughts on the new report by Blockchain Transparency Institute that states that only 2 major exchanges are actually reporting accurate trade volume? Do you think that the report is accurate? Please let us know in the comment section below. 

Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.

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Crypto Enthusiast. Terrible dancer. Former DJ. Amateur Marathoner. Electrical Engineer. Kool kat. Email me at [email protected]

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