Bitcoin Forum

Haven't seen this posted here so just wanted to share.

Recently The Tie released their findings of a study on the extent of volume manipulation by cryptocurrency exchanges. To no one's surprise, they found extensive manipulation amongst many cryptocurrency exchanges.


Link to Tweet: https://twitter.com/TheTIEIO/status/1107671178423033858
Single thread for ease of viewing: https://threader.app/thread/1107671178423033858

The Blockchain Transparency Institute (https://www.blockchaintransparency.org/trading-advisory-list) also publishes a list of exchanges that are suspected of inflating their trading volumes. Since different methodologies and samples were used, different results should be expected. But just for fun, how do their results compare against those of The Tie's? We used The Tie's "Low Potential Fake Volume" exchanges and compared them to Blockchain Transparency Institute's latest reports and this is what resulted.

Our lay man's conclusion: Pretty close match if you ask us.


Legend

The Tie
1. tick = a Low Potential Fake Volume exchange

BTI
1. tick = not on the exchange advisory list ie. not suspected of manipulating volume.
2. cross = on the exchange advisory list ie. suspected of manipulating volume.
3. blacked out = not covered by BTI research.

There are many fake volume and sometimes some shitcoins jump too high but after you login on some exchange the price is not the same as what they show in some coin monitoring site like coingecko or coinmarketcap.

So, I decided to trade some coins only in trusted exchanges which is well known here in the forum like Binance.

I don't think that's issue is only peculiar to shit coin alone I have had such drama when checking the price of bitcoin on coin market cap it doesn't completely tally with that of an exchange I use(luno to be more precise) the price on coin market cap is always higher

True, it isn't peculiar to shitcoins only but due to the facts those coins/tokens can easily be manipulated due to low volume, they're usually the target.

Concerning the price on coinmarketcap, the price you see there is an average price from combination of most exchange and not the actual price of the coin/token you're viewing. that's why the price there is always different from most exchange especially small ones like LUNO.

I addressed this report in another thread about it, which you can read here: https://bitcointalk.org/index.php?topic=5122381.msg50243331#msg50243331

Essentially, their methodology is deeply flawed. They took an average trade volume and multiplied that against the average number of site visits, and claimed that that is each exchanges' true volume. This is a completely made up and meaningless equation, which is evidenced by their hilariously enormous spread of results - anything from 0.15% to 1300%.

Yes, a lot of exchanges report fake volume to make themselves seem bigger and more significant than they are, but we can't draw any conclusions from a report with such poor logic.

It is true that the exchange market in crypto is very much manipulated by the admins of this exchanges but I don't think it is something we have to keep repeating because most of us already knows this and repeating it will just cause FUD in the crypto space which we don't need now.

I think what we should be doing is to enlighten traders to always take their money off exchange after trading every week because we never know what can befall from this exchanges since they have a central wallet and control the private keys.

It's pretty obvious that those exchanges new or even some established one as really faking their volumes. Maybe the question is why they are doing this fraudulent practices?

One reason I see is that to attract noobs investors, because competition is very tough this days, specially that we are still in the bearish cycles.

The fake volume is all about the market competition which involves manipulations. Every product wants to climb on the other product to shine. I think this is simply what this is.

Some Article claims that the percentage is even more, 95% of Reported Bitcoin Trading Volume Is 'Fake' (https://bitcointalk.org/index.php?topic=5123994.0)
Fake trade volumes are actually a reality
This is most done by small budding exchanges... I don't think a reputable exchange like binance can do that because they have spoil their reputation through such a simple cheap act.

According to Exchange Advisory List, only 2 exchange sites gives you real volume both Bitfinex and Binance (https://www.ccn.com/major-bitcoin-exchanges-accused-of-faking-volume-whos-trustworthy) are found that giving real volume compared to other exchange sites.

Look at the recent report below.

https://i.imgur.com/TWRf1Es.png
Source: https://www.blockchaintransparency.org/

But this is not 100% that both well-known exchanges don't have fake volume this is what Blockchain transparency institute report.
Much better to follow BLOCKCHAIN TRANSPARENCY INSTITUTE (https://www.blockchaintransparency.org/) or this https://twitter.com/bti___ for the latest report.

That is not true. If you scroll further down their page, you would see this:

https://i.imgur.com/YL7AHO8.png

And if you read it further it would say: Full trusted exchange rankings here (which leads to this link: https://www.blockchaintransparency.org/december-2018-rankings)

I wouldn't be surprised about that. They always do those fake reports so that traders think that there's a lot of trading going on in a specific site. Marketing strategy consists of some lies.

i'm pretty suspicious of these guys. their domain registration is private. nobody knows who they are. they popped up out of nowhere when the USA government starting investigating bitfinex/tether for market manipulation. and what are their results? obviously that bitfinex and the largest tether exchange (binance) are legit and everyone else is faking! lol.....

here, i got a article which explain this kind of situation.

https://www.fmz.com/bbs-topic/2488

Most of the suspicious exchanges show some really ridiculous volume and once you login to trade you see a different data from the one you saw before looking I think some exchanges are really manipulating things

It is not a strange thing anymore as it is being used as a part of marketing strategy by (usually) new exchanges to attract users. The hard competition between exchanges makes them to do such thing in order to get interest from traders. It is maybe also happen in any other bitcoin/crypto related services.

If two different analytics name the same cryptoexchanges, they can be trusted, I guess. Those are Binance, Bitfinex, Kraken, Gemini (the largest ones).

You are right, this isnt already a surprising thing anymore where exchangers do potentially fake out volumes for the sake of hyping up their exchange to gain users that do easily being hooked out
with huge numbers.
As a trader you should be aware on fake and real ones to avoid such problems further on.

The faking of volume can't be proven. All accusations of volume faking are merely based on speculations. We can't tell that the market is manipulated unless we.can prove them. This is the effect of decentralized together with the anonymity of the system.

Thank God it is called marketing strategy and not scam, if I was to be in their shoes too, I would do the same thing, I know a lot of people will be looking at me as a bad person but these actions of theirs is being influenced by us and I term it as a reprisal for our judgment.

Majority of us tend to judge these exchanges at the early stage of their life when they still have low volumes and we look at them as not qualified enough to hold or handle our trades because of their low volume meanwhile they might have the capacity to do so even with low volumes. Now with that fake report, they have been able to gain the attention of trader who are still performing well on the same platform they believe was not worthy because of low volume.

Faking of trading volume is quite common with the exchanges. This fake volumes were to enrich the trading through those exchanges. Quite often if some inspections were made over the exchanges there will not be no big issues with this fake volumes. In the past when the fake volume was found, drastic market crash took place and this too is mentioned as a reason for etf rejection.

Now that I see OKex and HitBTC on the list. I can confirm. Lots of bots in there. I did try to trade in them once, and I was left perplexed.
HitBTC even takes it further, their withdrawal fees is just so ridiculous... Never use that exchange if you plan to use it.

It is like a norm already in crypto exchanges. So use only the trusted exchanges. The longer you use a particular exchange, the less worry you will have on them. New ones are really scary to use, you don't know if you can get your coins back.

Firstly, all crypto currency exchanges site are once guilty of the fake volume list which I believed we all know that coinmarketcap was either. However, I dont trust much in the exchange adisory list because there's no point for top exchange site like coinbase etc will provided fake volume.

in the world of trade sometimes there are those who commit data fraud, the aim is clear to be able to look successful and be able to attract investors sometimes the way they cheat can they do. so we all must be careful and always careful if there is something that offers great benefits without us struggling to participate in the struggle, immediately report it to the authorities if we suspect data that does not make sense.

I think faking wouldn't get you that far in business though, like yeah you would get some users seeing your high volume but at what point can you keep it up, you can't do that forever. At one point an exchange needs to realize their volume is mostly fake and not real and the real ones make them the money so after certain time if the real is not enough than the business can't sustain.

You have to have high volume to make a lot of money from trading fee, if you do not have high real volume than you won't be making too much money neither which will result with you at one point saying "we are not making money enough" and closing the exchange via either regular ways or "hacking" that you basically steal everyone money and leave. That is why even if a place does 50% of fake volume than I do not trust them.

I understand the business tactics behind it. But how far its true the exchanges have set up the volume to that extend. I understand the competition behind each exchanges. This just covers the investors to their exchanges. But is that going to affect the market? I am bit confused about. I dont think this would affect the market growth of crypto currencies.

Actually there is still a lot of exchange that I think there is still manipulation, like yesterday 28th March 2019. I tried arbit coin because 6 hours had a price gap that was quite far, but when the coin just landed, the price suddenly dumped. I also see some suspicious trade on the trade history

i think it works much better in a smaller market without many competitors, where it's not the norm. in 2015-16, huobi and okcoin were obviously faking volume but they still rose to being the dominant/leading exchanges in the world. it was a much smaller market back then.

but today, exchanges like huobi and okcoin are a dime a dozen. the exchange market is not only over-saturated, but over-saturated with exchanges that fake their volume. it's just not as effective as it used to be. people aren't gonna switch to no-name exchanges now just because of inflated volume numbers. reputation and branding is much more important.

It doesnt really work these kind of tactics nowadays yet as you said people would just simply stick to those reputable ones rather than switching into new that they saw due to volume numbers.
I agree on your point about huobi and okcoin.

We have seen a number of news about faking volumes thats why im aint suprised if there are new volumes would do such act once again.

this was already expected, unfortunately because it is not a regulated market that is made periodic inspections is vulnerable to this volume manipulation, bad quality of provision of services and high frequency of scam cases. And there are still some people who argue that governments should not interfere in this crypto market because it will allow people to be restricted their freedoms, but I do not agree with that thought. without interference from governments, it will not be possible to inspect and take action in case some exchange manipulates its volume

Fake trading volume has been a persistent problem in crypto. It didn't start today, a lot of exchanges has been doing it; putting up fake trading volumes to deceive people. It also happened last week as two exchanges were about to overtake Binance on CMC Rankings but it was later discovered that the it volumes are fake. So, this is not the first time, that's why I don't trust most of these exchanges, it would be better trading within us in this community or with our colleagues and friends.

Moreover, faking trading volume is not a new thing just due to crypto space. It has been done in stock and forex markets for decades. Still, we need to be careful up to the level that we are able to. One simple right away tips we must learn out of these discussion is, volume is not at all a criteria anymore for choosing an exchange nor choosing a trading pair.

Until recently, I could not understand why such actions are performed on trading exchanges, but in my opinion, this is still a real price manipulation in order to provoke users of cryptocurrencies to certain actions.

It is better to use the most reputable one that has less issue than the rest of these exchanges giving fake data although it is common already in most exchanges. Be careful when choosing one these exchanges that you aren't familiar with you might feed your coins to the wrong hands.

In an ideal world people would ignore these exchanges, but in the crypto world people don't seem to give a shizzle and continue using the exchanges they know are participating in very shady market activity.

Most of these exchanges are very soft with their AML/KYC procedures, and that's what people like about them because they can continue trading trash coins over there. It's all about greed in crypto, not about what makes sense to do.

An easy way to figure out if these exchanges are really that popular, is to check out their website ranking stats. In most cases these exchanges have a poor ranking. Poor ranking with top 10 exchange volume is a red flag.

Was really surprised to hear it. I have traded and still trading in the best exchanges. I just believed its data shown. But i do understand that this is for the business and nothing else. What bring to exchanges by keeping the volume so high is the crowd to the exchanges. Expecting more crowd to pitch in to the exchanges. Will this in anyway affect bitcoin's growth?

That's right mate I'll go with your thoughts I think that problem to all exchange need to resolve that need to coordinate to each other the price of every coins listing their exchange avoid confuse of the people using different exchange for their investment.

Depends on what you define 'growth' is. If you're talking about tech development, then of course not. But adoption, price wise, I think yes, though the degree for the effect is hard to measure. In short, if you don't have a healthy market then the asset is prone to price manipulation, shady practices, lots of funds gone due to hack, etc. Traders/buyers/sellers, or users in general will definitely bear a huge risk if they continue trading on shady exchanges.

Some of the exchanges have fake volume, and the other exchanges have a real volume. It's not happening in crypto exchanges, but it's happening too in the forex exchanges. I don't surprise to see the table as I don't think too serious with that. As long as I can take the benefits from the crypto, then I don't have to worry. In the future, that will be many more exchanges that were showing the real volume than the fake volume because they will think that it is no use to give the fake volume and people will become smart to see something strange and they will leave those exchanges if somehow the exchanges make a fake volume.

Counterfeit volume is present in most major exchanges and they do this to be able to stand in the top 1 position in the coinmarketcap. This really affected investors because they were very difficult to choose good exchanges and I hope that in the future many tools will detect the virtual volume found and remove and everyone can see the accuracy in each exchange

Many of exchanges specially recently using fake volume unfortunately, and some of them faking their liquidity by a huge difference, meaning in some cases it can go as high as 90% or even more fake volume, they're not that hard to notice tough looking at their order books and the buy and sells that's going through at the same time, I started a thread about this and how to spot these kind of exchanges months ago https://bitcointalk.org/index.php?topic=5094490.0 (https://bitcointalk.org/index.php?topic=5094490.0)

Most of them use BOT to increase trading volume and it is appearing a lot at new exchanges. I think this volume increase will cause many new investors to face many difficulties in choosing. Coinmarketcap currently has no way to prevent this abuse, but in the future I hope that CMC will get the necessary tools to eliminate BOT and bring confidence to all investors.

No wonder that a lot of people tried to take advantage with the current market conditions and we are aware for this actions. I know it sounds tricky this days and we should be careful of what coin we trade and as well as the exchanges we used cause maybe we are into the wrong place. Fake volumes and some way of scamming looks like it growing right and taking a way to fool new traders, and so we should have to investigate before putting our money with them otherwise it turns into nothing.

Previous year some exchanges have greatly affected the volume with fake transaction and in 2017 also major exchange were minting coin out of thin year,thats why decentralized exchanges are suitable but tit will take time for them to get into action and i think exchanges should not support hard forked coin bcz they are useless and generally are used for manipulation purpose and it will greatly improve people and authority trust on crypto.

Achievable but wont really this time to have these tools thats why its still rampant to see these exchangers to be known manipulating their volume.Some of them done it obviously
and some of it isnt really that noticeable at all.The aim of these fake or pumping volumes is to get attention through the entire market as said this do affect investors yet most of us do really
target out which exchange do have the highest or top volumes.

I feel that this is not good because if you use fake trading volume, many investors cannot know exactly if the token you are holding is really potential or not. I think before investing in those exchanges, find out carefully because almost all exchanges that are on the market have fake volume and this makes me feel very difficult in make a choice

The coinmarketcap you talked about, are they any saint themselves ? Aside the Bitcoin price, ethereum and Litecoin, have you ever asked how other coins managed to get to the top list, especially there are some coins on that top list that you and I know that they don’t deserve to be there, what suddenly made them leave their last position to being top ?

Have read in many places with proof how they themselves are agents to this manipulation going on too, which is probably how the owner makes his money from the site. As long as what they do does not affect my investment, I don’t have any issue with it.

It is a known fact most of the information we found on site like coinmarket are not accurate and even the prices too so it is always better to check the trading volume by entering into their trading chart.

Probably the fake are more higher number in this situation more than the good exchanges but we don't have any other option to to face them properly we need to ignore some of the bad exchanges like we cannot know what will going on here at the time waiting will always helpful you to make the right decision properly.

In my opinion, all the crypto enthusiasts are here in the market for making money and regardless of what many people in the market and many websites in the virtual market may tell you to do, you should always have your own strategy.

This is very important and I think that every men who became millionaire in the crypto has had the same fake news going on around him but they have made it so I think it should not bother you. This is basically a trustless system as per Satoshi's view hence we do not need to believe into what exchanges are showing or stating. We just need to be careful by not making decisions by what exchanges are showing, as that is the basics of being secured in this decentralized environment.

I do not think it is fake for all the God's sake.

Do you know that couple of decades ago, the digital market was not even known to anyone but few out there. Today, its value is more than 3 trillion US dollar and the contribution of cryptocurrency is more than $140 billion which gives a very nice message that the market cap is not a joke because you could easily see the coins around being demanded and traded. So, better invest rather than doubt on this recovery phase. Because time is running out to catch the train from the beginning point itself.

Moreover, I just see these types of discussions are just the FUDs to collapse the confident among new investors in crypto space as these kind of things are not having any proof to catch those exchanges while manipulating their volumes and price levels.

If you are talking on the entire cap then its real yet those numbers do indicates that there is really a heavy demand towards cryptocurrency.

The thing we are talking here is about Exchange volumes which are fake or real ones.My answer is, that its both yet manipulation and faking volumes is
part of their plans where higher volume do attracts new traders and those things are facts.

Hey @o_e_l_e_o, the same guys came up with a rating system for exchanges.

https://thetie.io/data-transparency/exchanges
Compilation of their tweet: https://threader.app/thread/1126849741848027136

Given how their methodology was deeply flawed for measuring trading volume, wondering what your thoughts are on their rating system?

Thank you.

It's fairly uninteresting, IMO.

Sure, you can get some useful information at a glance, but there are a couple of fields which are either not useful, or quite misleading. For example, the suspicious volume reports are based on their previous findings, which as I've already explained are based on using fairly shaky methodology. Also, having a "Formal Market Manipulation Policy" doesn't mean very much if you choose not to follow it and manipulate the market and insider trade anyway (e.g. Coinbase). I wouldn't use it to choose an exchange, as it ranks exchanges like Coinbase and Bitfinex amongst the best, and I wouldn't trust either of those to hold any of my money or details, ever.

Thanks for the reply. Agreed that both Coinbase + Bitfinex shouldn't be amongst the best.

So just wondering, which source(s) do you use to help you decide on what exchanges to use? Haven't managed to find any good sources.

Thanks.

I'm not the right person to be asking, I'm afraid. I am extremely careful with my personal data, and so I refuse to perform KYC procedures pretty much anywhere. I have an unverified account on one exchange, but I couldn't tell you the last time I actually used it. Outside of that, I do the majority of my buying and selling peer-to-peer using platforms like localbitcoins or people I know personally.

If I was going to be picking an exchange, I'd primarily be looking on here and reddit to see how responsive they are to their customers' concerns, and what other real users (not paid for ads or articles) thought about them.

Yes you are right in this situation we are very confused to pick the right exchanges to exchange our investment but in most of the time when you people cannot choose the right one in sometimes for that day experience will play an important role about picking the right one for their exchanges.

For who already know maybe can see it is fake volume or not. Because from some traders that i know which is my friends, they always know when a market have fake volume to attract traders or which one is not.

It's not that hard to be honest. It just requires you to know what to look for. I always check the exchange's web ranking and the traffic it generates, then put that against the volumes they report.

Additionally you can look at the volume bars and put these against the volume bars of exchanges such as Coinbase and Bitstamp. If they follow a similar path, then it's most likely an exchange that doesn't inflate its volumes.

Coinbene for example, a notorious volume cheater, they consistently generate the same volume bars, even when exchanges such as Coinbase see their own volumes decrease without anything going on in the market.

Yeah, that is what we should do if we want to know more about the coin moves so we can decide to trade or not.
Maybe the cryptocurrency exchange gives a fake volume but maybe after we check their trading volume in the order position, we could know more details.
But even if that is fake, if we don't use the data to analyze, then we will not get a fake analysis because we only use the data on the trading chart only to see the movements of the coin.

It is not tough to detect the fake volume on the small exchange. The giant exchanges like Bitfinex, Bitstamp can use the automated bots for increasing the trading activity and this will help them to push up on coin marketcap listing sites. Fake volumes can attract more investors to the exchanges but it will explode sooner and slower.

That's true. There were many situations when some shit coins had large volumes, which came out of nowhere. Therefore, we must be more careful and pay attention to other factors when buying a coin.

I have seen bots already used in binance exchange but i rarely seen that used in bitfinex or bitstamp. Basically, the trading will create noise and increase the volume and sometimes there was someone that used two accounts to create fake sell and buy order in the market. How can you accurately determine the fake volume will destroy the exchange site itself? Just curious about that. Even the institutional looks so difficult to create audit about that

I agree that there might be some exchanges that would not be great and would be using fake reviews and trading volumes but there is really nothing to worry about because you get to know about an exchange that is not great and is actually making use of maybe fake trading volumes to attract users. Always go for the best exchange and i think Binance despite witnessing a bad hack is still the bests out there. Bittrex used to be the best.

This is not longer a new thing and I'm not surprised. You're not the first person to post this here, I have seen someone post something that is similar to this after they have conducted a research and found out that majority of the exchanges are using fake volumes to operate, I can't really remember where exactly in this forum I saw that post.

And they do all these just to deceive people and make them feel they are big exchange, but the truth is that they are not, most of them are wacks. Only bigger exchanges just like that of Binance are the ones that don't really do that, based on their research. So I'm not really surprised seeing this one too.

Yes, this is no longer a new information for traders and investors, exchanges always provide a fake trading volume to attract and advertise, there are not too many exceptions, large or small exchanges, more or less, they always create this fake information. However, people probably don't care too much about this because they know what is good for them, they know how to exchange prestige, they don't care about real or fake, they only care about the profit and what that exchange can bring to them

It is not that it is more false than real, what happens is that each Exchange handles its own volume, they do not have the consolidated volume, and in fact the actual volume almost by many Exchanges is not very well displayed.

To analyze the volume well, it is necessary to have the consolidated and still does not exist, there are still missing tools or pages where the contents of localbitcoins and some Exchanges that are Koreans, since these volumes do not have enough analysis of the market as such, because There is a lack of information, and each Exchange manages the volume of each one, which always guides me is Bitfinex, since that is where all the major movements take place, but nevertheless, it is necessary to review the volumes of all the most important Exchanges, for have a much more complete analysis.