Trading company FTX Global together with liquidity provider Alameda Research conducted a study aimed at identifying real and fabricated trading volumes in the cryptocurrency market.
According to the report, 68.6% of trading volumes that take into account services such as CoinMarketCap are falsified. This value is much lower than that voiced by Bitwise Asset Management. According to her analysis, the stock exchanges fabricate up to 95% of trading volumes. The authors of the current study claim that Bitwise used too strict parameters, which is why some of the real volumes were not recognized.
“We do not exclude that our methods may also contain errors, but we still believe that they allow us to make a more accurate picture of the origin of trading volumes in the cryptocurrency market,” the researchers write.
The Alameda method included verification of six parameters, including manual verification of information, comparison of information from a glass of applications, so on.
A manual check provided a clearer picture of the presence of laundering trading. “At some exchanges, we found a lot of signs that signal an overestimation of volumes in comparison with the bids that were in the glasses. Also, certain sites used data from other exchanges, passing them off as their own. Some practice more advanced tactics, for example, the introduction of large false volumes against the background of a large number of small requests, ”the publication says.
“The lion’s share of the exchanges shows transactions that did not go through their book of orders before they were registered. Such transactions significantly exceeded the size of applications that were placed in a glass, ”the researchers also write.
In most cases, this practice is used to get a higher place in the CoinMarketCap list, and this in turn allows you to attract more users to your trading platform and take increased fees for listing tokens.
Alameda cites as an example FCoin, Bitforex, Coinex, Coinbene and Coinsuper – exchanges, overestimating the volume of trading using the so-called “mining through transactions.”
This is not the first study of this kind. At the end of last year, the Blockchain Transparency Institute (Blockchain Transparency Institute or BTI) reported that more than $ 6 billion in daily trading volume were falsified. A similar figure was cited by an anonymous Cryptointegrity research team.