REPORT: 73% of crypto exchanges faking 90% of trading volumes

A recent report on wash trading in the cryptocurrency market shows a marked decline since the start of 2019. However, the majority of crypto exchanges are still faking nearly all of their trading volumes.

Wash trading is a form of market manipulation which artificially inflates the activity on a crypto asset, thereby attracting investors who are seduced by the resultant FOMO (fear of missing out).

The practice is technically forbidden and was banned in the United States under the 1936 Commodities Exchange Act.

The latest market surveillance report from the Blockchain Transparency Institute suggests that overall wash trading has declined, however, it is still prevalent on a number of top crypto exchanges.

The findings revealed that global wash trading has reduced by 35.7% among the top 40 exchanges since the beginning of 2019.

At the same time, however, the report found that among the top 100 exchanges on CoinMarketCap, there are 73 currently which are wash trading over 90% of their volumes.

The BTI has also launched a live tracking page to show which cryptocurrencies and exchanges are currently wash trading the most.

Of the top crypto assets, privacy coins were found to be wash traded the most, with Monero and Dash getting over 90% each.

Other top manipulated assets included Bitcoin Cash, Litecoin, EOS, BSV and Huobi Token, each with more than 80%.

Crypto exchanges getting clean

Crypto exchanges getting clean

Although the report details deceptive practices on many crypto exchanges, there is some good news to be found.

The report stated that Kraken, Poloniex, Coinbase, and Upbit were found to be “cleaner” than before, reducing the amount of wash trading on their respective platforms.

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On the flip side, the worst two exchanges for wash trading were OKEx and Bibox, with fake volumes reportedly exceeding 75%.

Geographically the cleanest exchanges were found in the US and Japan primarily due to stricter regulatory standards.

South Korea, which also has stringent regulations, was found to have a higher instance of wash trading for privacy tokens XMR and Dash as noted above.

There have been moves to delist these high anonymity crypto assets from South Korean exchanges in recent weeks, however.

The BTI has now created a list of verified exchanges that it claims are reducing the practice of wash trading.

The latest added to this list of good guys include Binance, Gemini, Bitflyer, and Indodax.

The world’s top exchange, Binance, has dropped below 10% after hovering around 20% for the first few months of 2019.

Japanese exchange BitFlyer is now below 5% and Gemini has also fallen under 10%.

The BTI verified program uses a machine learning wash trade algorithm to analyze 26 different data points before determining a wash trade.

To qualify exchanges must have less than 10% wash trading over a 30-day period.

CoinMarketCap bad for business

BTI singled out CoinMarketCap as one of the industry’s bad players for continuing to list a number of scam exchanges.

“CMC still lists numerous scam exchanges in its Top-10 ‘Adjusted Volume’ rankings,” the report said.

“Its Top-10 list includes LBank, BW.com, Bit-Z, Coinbene, and OEX, for which our data shows wash trading rates at high levels from 96.9% up to 99.7%.”

It added that CoinMarketCap does not verify volume figures and encourages exchanges to report higher volumes to increase their visibility.

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The overall situation has improved in 2019 but there are still a number of culprits for excessive wash trading so reports like these are a good reference in determining which ones to avoid.



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