I think once exchanges opened APIs and embraced bot reading, this proliferated. I’ve been long seeking a crypto-hedge fund that can manage my day trade portfolio so I don’t have to react.
I have sticky notes on my wall, one was to write some natural language processing to parse out the ‘trollboxes’ on a few exchanges along with feeds, and place futures positions based on self-learning algos. But I don’t have the $ you need to start playing against these guys with the big stacks. There are sharks on all the exchange… if you ever trade on Polo, watch the auto-rebids when you make buy/sells. You can parse out what they are doing by tweaking you buy size or how far you undercut.
If one of the big boys hasn’t embraced the fact that they won’t be caught (or at least we’ll never prove who it is) and thereby are missing out on the biggest margin activity ever. My bet is a few JP or Goldman employees bankrolled some developers and did the necessary work to set up IP networks and basically run the markets. It’s like a poker tourney when you’re dealing with a limited supply, and when you can start to correlate geopolitical news events and upticks in prices, you can double your stack in days.