Bitcoin Forum

According to Reuters  (http://GDAX disclosed that Coinbase was trading on GDAX but failed to disclose it was operating more than one trading program and through multiple accounts, the CFTC said.)and other outlets, Coinbase has been fined for using multiple trading accounts and algorithms that created the illusion of a more liquid and active market for bitcoin and litecoin on their GDAX professional trading platform.

It comes as no surprise to most people on this forum, as most exchanges use market making bots or these are active on behalf of liquidity pools. It is just the fact that multiple accounts were used undisclosed the main argument for this fine.

If Coinbase did as well, then the presence of a regulatory body would result in a fine for all trading platforms with greater degrees than Coinbase.  did the report talk about the percentage of trading bots compared to the percentage of real trading pairs?
And why do they need that in Bitcoin ? as they are two of the most attractive markets, and I do not think that trading volumes are what drives people to use Coinbase rather security.

This is not a news anymore IMO. Most exchanges are still doing this to pad their stat count to attract more traders on their platform. I'd be more surprised if exchanges are sticking to the clean and fair methods instead of cheating nowadays. Also, this happens right before they go public, so this might affect the stance of some investors looking to buy some of their shares. Either way, $6.5 million is already chump change to Coinbase so I guess they'll just shrug it off and call it a small hindrance.

Yea, of course anyone who pays at least little attention to buy and sell orders in exchanges would see that something is off in most cases. Like when new exchange has significant trading activity just right after it started working, but in this case i am a bit shocked that Coinbase was doing it , i had impression that Coinbase is reputable and legit.

Thank you CFTC for telling us something we already knew  :D
All exchanges are doing wash trading including Coinbase and it is interesting that this comes just after Coinbase announced they should get listed in stock market.
I am reading that this was related with their trading in period from 2015 to 2018, and imagine what the situation is now with much bigger volume than before.

Interesting to read this short CTFC report and some former employee of GDAX was doing this:
https://www.cftc.gov/PressRoom/PressReleases/8369-21

What about decentralized exchange, is it worst than CEX?

Coinbase is a reputable exchange site, but this one is a proof that exchanges are doing something behind the screen to manipulate the trading volumes and that fine is not enough hopefully if proven already, coinbase will have an initiative to disclosed this one.


Depends on DEX you’re using and seriously, its hard to trust DEX because they are totally manipulating the volumes.

I always knew that coinbase was not so honest exchange. Now officialy

Coinbase like dex exchange because we can use price based on how much we want like on binance or other exchange, but Coinbase most recommended exchange because many coins after get news listing on Coinbase price pump. I need many coin can list on Coinbase to make price pump and could take many time with profit on altcoin trading.

When it comes to the trading volume you can't expect the accuracy because even on coinmarketcap you can see two value like reported volume and actual volume and its a known facts that every exchange is manipulating their trading volume to boost their rank up for certain trading pairs and coinbase actually get caught due to strict regulations and audit while exchanges operating from other regions also will face the same if there is such kind of audit.

Yeah, but Coinbase is regulated pretty strictly by the US government, and I'm kind of surprised that they'd do something like this.  With off-shore, unregulated exchanges I'd say most of them are engaged in some sort of shenanigans but Coinbase not only has a lot to lose but also has less of a chance of getting away with shady shit like this.  Very interesting.

I don't know about that; they've been seemingly honest as far as not scamming their customers.  You might see threads about their crappy customer service or people getting their accounts banned for trivial reasons, but there haven't been any credible claims that they've actually stolen from their customers.  Of course this new charge against them sort of shows that they're not squeaky clean.  I don't think any crypto exchange is.

My take is that they wanted to show a higher degree of liquidity to attract huge players that need it. My take is that this would be in line with Coinbase's strategy of bringing in institutional level players - these may need to build and drop very large positions in a short time thus liquidity is a big thing for them.


Exchanges playing in the grey area is not news yeah, 6.5 is just change agree. It is just interesting because Coinbase will possibly go public soon.


The good thing is that it may bring the price to a slightly more reasonable figure than it is now ah?


Yep - and  that is pretty much what you can ask in the Crypto world - if they do not take your money and go MtGox style they are good enough.

Sad to say that most of the exchanges are doing this and since there’s no much regulations about this one, they think that this is fine until this things happen. Coinbase is a great and big exchange as well, but this one can really hurt their reputation and honestly, people might be in doubt again to buy bitcoin on exchanges because of this incident.

This is an open secret already, maybe they are good at hiding, specially those top exchanges, but sooner or later they are going to be discovered.

As for the fine, hmm, quite amusing to see them giving just like a slap in a the wrist, $6.5 m is nothing for Coinbase, they should have been penalised even more, IMHO. I'm sure they have made billions out of inflating their liquidity in the market.

I believe that the quantum of punishment is fine and now they should move on. It is not something which is very rare in the cryptocurrency market. Almost all the exchanges do that (at least during the initial phases). I am one of the users who registered to Coinbase in 2014 and back then it was very difficult for the new exchanges. Coinbase had a lot of promotional offers which were mutually beneficial. Those are the things of the past. Now it won't be fair to penalize Coinbase for something that happened many years back.

This was honestly a good thing that they were fined. Indeed in the market we all are always worried about the problems that whales can create and at the same time if a reputed name in the community will try and create such troubles for the community itself;  then what do have left ?

Bitcoins is something which will only grow if the whole community strives to not only make profits but rather keep the who system intact, it's not centralized rather the centre is every single person out there who owns even a little amount. Coinbase should even give an apology to everyone involved.

The trading bots is something that I would never trusts, those innumerable telegram groups rather tries and creates unnecessarily a huge wave to move the price , the sites which does think that they can predict the price etc is more or so ruining their own reputation.

At the end of the day all of the exchanges are involved in such things and there should be rather stricter rules for them so that they can stop earning benefits from the individual traders. This is no less than the whales moving their coins here and there just to scare away people in the market.

Hopefully they try and improve themselves, their whole community so that other people related to them does not have to face problems.

No doubt Coinbase needed to get this matter wrapped up as part of their IPO preparation.  You can't go to market with an unresolved regulatory matter against you.  This is further reason that crypto exchanges need to be regulated though.  It's too easy to game the system if their actions aren't monitored.

I believe that all exchanges have manipulation by the owner of the trading property with tricks to take money from users.  It seems that transaction costs do not satisfy them.  The CEO of Bitmex went to jail, Coinbase was fined and it could be Binance, Houbi or Okex ...
Even decentralized platforms like Uniswap still experience exchange rate manipulation using pre-programmed BOTs.  My advice for traders is to trade less and choose good entry for the best return.

Most of these exchanges, whether big or small are guilty of this kind of scheme. However, some wash trading is owed to the developers of the coin themselves. Because they want to make it seem their coin has active trading and attract potential traders. You can spot those coins if you have been long enough seeing a lot of new alts being traded, pumped and dumped, and gone. Coinbase fine is just loose change for them, however, this will serve as a warning for some exchanges that may practice this kind of fraudulent trading activity.

I saw this from the other small exchange where they really do this to pump up their standings on CMC or even on other site so that they can fool users and worse to scam them but in coinbase its surprising to see them doing that since they are successful already. Maybe they want to hype more their platform since they have so many competitor as of now. So from this incident maybe this really serve as a warning to other that their are legal entities that watching them if they do any illegal acts here.

@paxmao the link for the reuters isn't attached, the link's broken.

This case isn't new for the daily traders, we know that exchanges make their own trades to provide liquidity and their own market. They're going on IPO and this have probably seen due to the attention that they've taken.

What's next if SEC would also chase other exchanges that did the same?

sure.  If so, this financial market is fake and even other industries such as real estate, securities, and commodities are also manipulated.  But the ultimate purpose of trading is to make a profit so there is only way to buy and hold until the right time to take profit.

Perhaps the free-trade BOT excites investors and makes them more active in trading in this market.

The news is that CFTC has found out that this happens  ;D
You know, better later than never.

The topic is interesting because it opens the road of fining them until they get the numbers much closer to the reality. And it gives a signal for the other similar agencies from the other countries where the exchanges are registered.
As said, 6.5M is nothing. But more such fines can follow. It's an interesting move imho.

When all the other places do it, it is not a possible thing to not do it and look like you are down. Assume that everyone shows their true volume and in that world Coinbase is one of the highest ranked ones, but if we live in a world where everyone else, even the smallest places do it (and I have seen them do it myself) that would mean that Coinbase would be outranked by much smaller places and that is why they had to fight fire with fire, which doesn't help anyone obviously but there was no way around it to get their true place, they can't do it fairly.

If all websites with fake volume was seen in CMC and there were warning signs of "real volume found to be half of what it is, be careful at this exchange" that would make exchanges stop suddenly, but they still do it because they can get away with it and even gain something from it on top of that.

I am not shock by the news of coinbase using numerous account to create deceptions of the liquidity pool cause alot of exchange site are guilt of this action especially Binance and their new swap exchange concept on their BSC platform which is the reason why I don't trust some Defi project price.

This kind of behavior is not well tolerated by crowds. Why Coinbase does something like that. They are one of the reputable and legit crypto-exchanges. This will only hurt themselves and the trust in the exchange. 

Coinbase messed up big this time. It's understandable they are wash trading during 2015-2018 since almost every exchange does this and crypto wasn't particularly as famous as 2021 but they should have anonymously did it instead of disclosing one account that might link to the other. The authority probably increased their manpower and Coinbase only but caught this time.

This is not a new technique followed by most exchanges and same is the case with Coinbase.Yes they are using tricky algorithm to increase the trading volumes of coins to attract more customers.Coinbase has filed for an IPO this year and they are being verified by the authorities for such large issue.

https://i.ibb.co/dJPFyTY/Screenshot-20210323-135727-01.jpg (https://ibb.co/3Yp2H3Z)
 (https://imgbb.com/)

With increase in prices the trade volume rose on coinbase with huge numbers.The most bitcoin ever traded in a month on Coinbase was December of 2017, when the cryptocurrency’s reached as high as $19,891 and 1,275,295.522 BTC traded hands on the exchange.So you can clearly say that yes they are inflating the liquidity of most traded coins on their platforms.Its now more common technique to attract customers in every field.

Actually it’s very strange that CFTC fined Coinbase only now after three years had passed. It’s hardly believed that they haven’t seen before that Coinbase creating an artificial trading liquidity of LTC (and probably a lot of other coins)! They waited till now when Coinbase became one of the most well-known crypto exchange platforms and fined it with ridiculously small fine. Something is unclear here. That’s really might be just a first small warning to exchanges to stop faking.

If the situation is true and if they really mess with the real data then they needs to pay for the fraud as people usually look for liquidity and if they were faking those data then they need to pay for it.


It is not new that exchanges are faking their date to attract the users but for an exchange like Coinbase who is registered in the US they should know better that they will get into trouble.

You are right! These kind of news or situations isnt something surprising anymore.People had already get used to it where these platforms or exchangers would really do such things just
for them to bloat out their trading volume and liquidity just for them to look that they are really doing well into this market.When trying to impress out the public then it would
really be starting on showing off some good numbers which do indicates that there are lots of users been using their platform where it do really create some positive vibes or impressions.
This isnt the first time incident about manipulation or deceiving actions made by platforms just to make it look good.

In fact, such bots are used in every exchange. They attract traders by creating fake volume. 6.5 million fines isn't enough for them, more fines should be levied against them, they are always pausing user accounts for no reason.

$6.5 million is not a big amount for a corporation such as Coinbase, who are going for the IPO with valuation of $77 billion. But this is more like a warning from the SEC. If they continue with their unfair practices, then they can expect even larger penalties. Anyway, I don't expect Coinbase to do the same mistakes now on. With such a huge userbase, they don't need to indulge in such practices.

I do not understand why USA is focusing on the american crypto companies so much and go hard on them when other nations companies do not get half the things american ones get. For example, how many people in USA uses Binance? I think there were a lot last time, and I think it is obvious that we are not talking about USA trying to ban every single non-USA company neither.

I believe BNB is used in USA a lot as well right? And if we take all of this into consideration, that means USA should be banning or at least give a huge fine to Binance as well. Binance is just example, you can replace that with any company in the crypto world (even non-exchange ones) that are working and have american customers. This is why I think it is quite obvious that what USA is doing with these is actually hurting the companies in USA and helping the ones overseas.

LOL

By far best exchange Kraken. Coinbase is in exchange business for profit, Kraken is because they believe crypto will change the world. Coinbase faking volume is another proof who they are.

Coinbase most popular exchange and become your way when buying coin because when have new tweet from Coinbase twitter never wait again for buying because many coin listed on Coinbase can pump suddenly. But have effect when any coin delist from coinbase make price down. Now coinbase have support with many coins listed on their exchange market.

Many of the current exchanges are very interesting to attract traders but I can't say if the platform is very attractive but the coinbase investment is making it very interesting to attract traders but I don't know if they will cheat anyone from the coinbase but I can't say that i will not be able to invest in the future but I am making it very interesting to invest in the coinbase so I can say that it would be good to invest