Many Exchanges Continue to Engage in Wash Trading, Wash Trading Research (Full Version) Shows

TokenInsight
Oct 31 · 7 min read

Almost four weeks after releasing the first part of Wash Trading Research Report, Tokeninsight has come up with the new full version of the Wash Trading Research report to update you on the latest status of the deceptive practice of wash trading among exchanges in the cryptocurrency market.

Our full version report shows that many exchanges have continued to engage in serious wash trading practices despite being exposed of the wrongdoing. Of the 24 exchanges analyzed for our report, only four exchanges have been reporting their real trading volume with more than 90% accuracy. The four exchanges reporting the most accurate trading volumes are Coinbase Pro, Poloniex, Gemini and Bitstamp.

Many Exchanges Continue to Engage in Wash Trading since we published our wash trading report. Ten exchanges were found to have wash traded their volumes up to over 70%. The ten exchanges are HitBTC, EXMO, MXC, Biki, Bgogo, Bibox, DragonEx, LBank, CoinEgg and CoinMex.

Likewise, the remaining ten exchanges were found to have wash traded less than half of their reported trading volume.

This report analyzed trading volumes of the following exchanges: Binance, Bitfinex, Bitstamp, Bittrex, Coinbase Pro, Gemini, Poloniex, Bgogo, Bibox, BiKi, BitMax, CoinEgg, CoinMex, DigiFinex, DragonEx, EXMO, Gate.io, HitBTC, Huobi Global, KuCoin, LBank, MXC, OKEx and ZB.

Key Points:

✅ According to a report submitted to the U.S. SEC by Bitwise in March 2019, “wash trading” is currently a very serious problem that exists in the cryptocurrency market. It was stated that true trading volume of the overall market accounted for only roughly 4.5% of reported volumes, and only 10 exchanges have reported figures representing true trading volume. The report exposing the wash trading was made public by the research institution for the first time, and it shocked all the market participants.

In resistance to Bitwise’s report, most cryptocurrency exchanges have made significant efforts to advance their “wash trading” algorithms to avoid further detection. Some exchanges have even gone as far as developing technical improvements directly from the detection methods published in the Bitwise report. All this has led to even more fragmentation in the market and confusion for traders in understanding accurate market volumes.

✅Alameda Research, a market maker and provider of over-the-counter trading services, published a research report in July 2019 and has continuously released market reports that monitor real trading volume data. Their results show that 88.3% (Oct. 16th, 2019) of the trading volume from the cryptocurrency market is considered to be wash trading. Due to the limitations of their evaluation model, Alameda Research has only been able to draw three conclusions to the authenticity of exchange trading volumes: reliable, 50% reliable and unreliable.

✅The difficult part to identify the wash trading is unable to collect data from exchanges for regular investors.

✅As a leading digital token rating and research agency, TokenInsight spares no effort to establish its own data center based on the interests of investors and has recorded the transactions of 24 mainstream exchanges in periods from 00:01 on September 3rd, 2019 to 22:35 on September 21st, 2019. Later, we conducted a qualitative and quantitative analysis of the “wash trading” by using a power-law based quantitative model and two comparative analysis methods.

✅According to our analysis, some of the non-top-tier exchanges continue to show serious “wash trading” issues.

✅Wash trading detection and monitoring will be launched on TokenInsight’s official website in the upcoming future. Individuals can use this page to view the real-time wash trading volume of cryptocurrency exchanges. As we continue to develop our models for identifying wash trading behavior, TokenInsight will continue to provide complimentary reports that supplement our findings to the market.

Read the full report:


About TokenInsight

TokenInsight is an independent third-party data analytics organization whose focus is to provide accurate information and ratings on companies developing in the blockchain industry. TokenInsight is dedicated to providing accurate ratings, research, and analytics that contribute to intelligent financial decisions and market transparency.

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TokenInsight

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Global Token Data & Rating Agency

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