Wash Trading Bitcoin Part II: Who and why is someone wash trading on Bitfinex?

If you have not read my previous article, I have well established that wash trading is allowed by Bitfinex’s trade engine and you should read that article before this one.

Some people have asked me what is the point of wash trading on Bitfinex? People generally like to point out that in order to wash trade on Bitfinex, they’d still have to pay a fee.

First, I know of at least one instance where it appears that a wash trade was not charged a fee for a trade.

Second, even if a fee is charged, that doesn’t mean a wash trader paying fees is really paying fees.

If you’re a shareholder in Bitfinex, you’re allegedly paid dividends. These dividends come from fees. If you’re wash trading massive amounts of Bitcoin on Bitfinex as one of these shareholders… you basically get some of those fees back.

If people decide to trade on Bitfinex because they see the high volumes and assume there’s liquidity, you would net-profit from shilling trade volume on the exchange when they come to play.

The volumes on Bitfinex will make Bitfinex appear to be better than how it really is, increasing the perceived value of your shares.

Don’t forget, if you’re manipulating the price up with your wash trading activity, I’m quite certain you’ll be able to cover the minuscule 0.1% fee.

Basically, think of it as eBay allowing you to bid on your own items. Sure, you might end up winning your own auction and have to pay the eBay fee in a worst case scenario, but you might get other bidders to move so they don’t miss out.

And you don’t want to miss the boat, right?

“Holy shit this is the Number 1 BTC/USD Volume exchange, I’m going to miss out!”
- Potential Shareholder, April 3rd 2017

Be wary about Bitfinex management trading on their own exchange…

It’s been well established that Phil Potter trades himself on his exchange, while operating a Bitcoin trading hedge fund.

It’s also established that the CFO of Bitfinex, Giancarlo Devasini, has also used his own exchange.

I’m not going to argue if he traded on his own exchange like Phil Potter has admitted, but it’s not a stretch to think that if you deposit Bitcoins to Bitfinex, that you intend to trade with them.

Giancarlo admits himself that there’s no point in depositing Bitcoins to Bitfinex unless you intend to trade with them.

Interview from October 1st, 2016

In my opinion, it’s a conflict of interest to use and trade on an exchange you operate, because quite simply you have a view of what’s going on that ordinary traders do not.

You know when large wire transfers come in, and it’s fair to speculate that the individual sending in a large wire transfer is going to buy crypto-currency. You also see where the hidden orders are, and trigger prices for orders.

People have in the past have already speculated that somebody from the inside is using this information.


And Phil Potter, Chief Strategy Officer for Bitfinex, does in fact operate a Bitcoin trading hedge fund while trading on his own exchange.


When you see dramatic crashes and instant recoveries in the price of Bitcoin, some people claim this is just stop hunting.

I would argue it’s not really stop hunting if you know where all of the stops are, where the hidden orders are, and know exactly how much BTC, or USD you need to trigger someones stop limit order, or margin call.

The Wash Trading could also be money laundering…

You could use unverified accounts stocked with Bitcoins to wash trade and conduct trades in order to move money from unverified accounts, into ‘clean’ fees from bitcoin trading, by just having these accounts constantly cycling money back and forth with each other…it would take a long time, but you’d eventually get there and could do the bulk of the balances with some bad trades on your ‘unverified’ accounts to your clean accounts.

Unverified accounts on Bitfinex have no restrictions, other then the fact that they cannot withdraw US Dollars from the exchange. This is something that nobody can do anyway unless they’re closely associated with the exchange.

It has been speculated by the community that the EOS ICO, which Bitfinex is closely involved with is laundering money.

Source (Archive)

Bitfinex is the only exchange with ‘US Dollars’ (cough) that trades USD against the EOS ICO.

USDT is not USD, but a Tether token, which is a company owned by Bitfinex

If you had a lot of dirty Bitcoin or crypto-currencies, one way to clean it up would be to make a fake ICO. Poof. Clean money.

And it doesn’t stop there, Tether (which is majority owned by Bitfinex) worked with BTC-E and handled withdrawals, and they handle withdrawals for the new BTC-E as well.

So it’s provable that Tether has money from an exchange the Feds already shut down.

And the ‘new’ BTC-E as well.

Perhaps Bitfinex made a deal with the devil in order to try and survive their banking crisis.

Wash Trading CAN influence prices

Some people claim that wash trading can’t influence prices, I disagree. If you own most of the ASK orders on the book to a certain price, you can simply FOMO buy from your own ASK orders and walk the price up.

Even if not all of the orders are your own, but a significant majority of them are, you can pump prices with fake buying, or dump on prices with fake selling to your own bids.

The only thing stopping you would be hitting a large hidden order.

Other traders and bots would also respond to your buying activity and buy from your orders.

Obviously, this would only be feasible if you have several thousand BTC and tens of millions of dollars to wash trade with.

Desperate times, calls for desperate measures: Fake it till you make it.

In an October 1st, 2016 Interview with the Chief Financial Officer of Bitfinex, Giancarlo mentioned how they thought about pushing wash sales through their engine. They then decided ‘against allowing this’, because ‘you can only lose your virginity once.’

This was prior to when they had their banking cut off in March 2017. Since they lost banking, Bitfinex has been absolutely wildly successful in their trading volumes.

It’s almost as if Wells Fargo cutting them off was the best thing that ever happened to them! Wells Fargo was the last corespondent bank available to Bitfinex as well.

He was right. Bitfinex is ‘crushing’ the competition. With no banking and only a few select people being able to deposit and withdraw funds.

I personally believe that just maybe Bitfinex did not intend to defraud everyone at the start, but they have been hit by very, very big sticks.

First with losing $72 million dollars of their customers funds, imposing a legally questionable 36% haircut on everyone, and then having their banking, the critical lifeblood of an exchange, cut off indefinitely.

Bitfinex admits their lawsuit against Wells Fargo was just trying to buy time.

They are simply absolutely desperate to continue to function and are doing everything they can, even if it’s a little… illegal.

The trading engine allowing for wash trading is a screw up of such epic proportions that I do not believe it was originally designed this way, and that it has to be intentional.

I now wonder if the trading engine was modified after they lost banking in order to support wash trading, as Bitfinex was in a fight for their lives.

Their tactics simply changed in order to try and stay afloat. If they can pull it off without getting caught, nobody is the wiser right?

Bitfinex is not beyond conducting legally shady behavior in order to continue operations… as I’ve proven with Phil Potters comments on banking.

But I have quotes from their CFO as well.

We’re not criminals, but now we have to learn to bank like criminals.
- Giancarlo Devasini, Bitfinex Chief Financial Officer and shareholder of Tether during a verbal conversation regarding Tethers.
Original Article)

Without real banking and people being able to deposit/withdraw fiat funds, trading volumes would dry up, destroying the value of the BFX shares and Bitfinex as a company, and this would be a disaster for people who converted their BFX tokens into equity, as now their equity is worthless.

If you remember when they lost banking, the premiums on Bitfinex started to skyrocket against other exchanges, at one point as much as $200 more than the rest of the market. Suddenly the premiums came back down.

We know they didn’t come down because they re-established banking, because they haven’t.

An exchange without banking is a plane without jet fuel. It isn’t going anywhere.

Who’s in Charge of Bitfinex? Who calls the shots?

I’ve previously posted a recording of Phil Potter being caught off guard by a simple question. “Who’s in charge of Bitfinex”, he practically had a stroke.

Here’s the answer Phil Potter refused to give out.

I’m sure there’s no conflict of interest here. A guy that runs a Bitcoin arbitrage hedge fund, trading on his own exchange and being one of the primary decision makers?

I suspect… that his decisions are going to be influenced based on what his positions are on Bitfinex.

Like what happened with the BCH distribution scheme where they invented a wonky co-efficient that traders tried to abuse with wash trading and other manipulative tactics.


It’s simple really.

“swapman” is an administrator of WhalePool

I thought, maybe it’s just sarcasm? Nope.

WhalePool deletes anything Bitfinex doesn’t like.

WhalePool is not independent.

“swapman” is an administrator on WhalePool

WhalePool has also deleted a tremendous amount of videos from their channel when they figured out I was fishing through them.

If everything I was doing was just “FUD”, why would they get so upset? If people believed my “FUD” as they call it, it just creates buying opportunities for them.

If everything I was doing was just “FUD”, they wouldn’t go deleting all sorts of videos from their YouTube channel, and they’d certainly just ignore me.

Obviously, they have something big to hide. I sometimes wonder if WhalePool is really just a Pump & Dump group.

Don’t forget that they deleted the Phil Potter interview where Phil Potter admitted to what is arguably money laundering.

I guess they think the evidence I show people becomes fake once they try to scrub it off the internet.

No, not really.

Anything remotely critical of Bitfinex pretty much gets you attacked, and the attacks are getting more bizarre…

Bitfinex Employee ‘Andrew’ Source (Archive)

Suffice to say, I will never ‘debate’ Phil Potter on a channel as biased as WhalePool, considering how close they are with Bitfinex.

The hate is absolutely incredible, but I guess that’s expected when all of their money is on a single platform.

The Big Secret: What I’m actually butthurt about!

I’m not Butthurt that I sold my Bitcoin. I’m actually butthurt that I didn’t record Phil Potter drunk and admitting to shorting on his own exchange during the Bitcoin ETF denial, and how he was bragging about all of the money he was making from shorting Bitcoin on Bitfinex.

But…. at least I can show this is not the first time Phil Potter has done something like this. He once made the New York Times, and then was promptly fired.


Luckily even without his comments from March 10th, 2017, I’m still able to show people some of the nonsense going on. Besides, him admitting to money laundering is way worse.

Always research your exchange and the people behind it. Look at their background. If you can’t find information about them, it’s for a reason.

Exchanges have KYC/AML.

I have KYE.

Because if you don’t do your KYE, you’re going to wish you had some KY.

There’s good reason Bitfinex and Tether hide their physical addresses behind proxy corporations and ambiguous jurisdictions, along with where they are banking currently.


I am watching threads on Reddit that contain my content, and I have noticed something. The primary attacks against me are always ad hominem. Usually the standard “He’s just butthurt he sold his Bitcoin”.

These attacks have gotten more bizarre over time. People actually think I’m so butthurt that I’m going to commit suicide. Please.

I’m on record in April 2017 predicting skyrocketing prices. No, I’m not buying in. I knew the price was going to go up because of fraudulent reasons. My warnings to everyone were telling people not to short Bitcoin.

I’m not going to knowingly participate in something I believe is a fraudulent rise. I’m a supporter of the idea of Bitcoin and I’m also against bail-outs and bail-ins.

Fraudulent exchanges like MtGox with their WillyBot and MarcusBot triggering the 2013 rise, caused a catastrophic amount of damage to Bitcoin’s reputation when the scam was exposed.

This time the ending won’t be the same.

It will be far worse, in combination with a crackdown on ICO’s and Bitcoin exchanges.

Bitcoin in the end will survive it, however. The Bitcoin network and computer code has no concept of it’s own price and bitcoin works regardless of what it’s market price is.

The good thing is, a lot of bad and malicious actors will be flushed out of the system, or to put it in WhalePool’s terms… rekt.

Trade carefully.