Chinese bitcoin spot exchanges OKCoin and Huobi are faking most trading volume

[bitcoinmarkets]

may be easier to read web version: http://www.bitcoinfuturesguide.com/bitcoin-blog/reminder-chinese-bitcoin-spot-exchanges-okcoin-and-huobi-are-faking-a-majority-of-their-trading-volume



To most traders it is common knowledge that Chinese exchanges fake their volume, whether it's OkCoin and Huobi's spot or futures exchanges. Here's an example from Huobi to demonstate the absurdity of the fraud they are committing:



On the 1-day candles you see the volume at over 2.2 Million BTC being traded on Huobi.

And here's the same chart for OKCoin:



Oh no! Only 2 million BTC daily volume on OKCoin. They lose the fake volume competition with Huobi Shame to their family.

Raise your hand if you think OKcoin and Huobi are really trading 4.5 Million bitcoin per day, almost 1/3 of the current supply:



So we don't even need any more information than this to know that they are committing fraud in their trading volume. Taking 1,000 BTC and trading it between two exchange accounts at 0% fees and reporting it like it's a normal transaction would be a criminal offence in any regulated environment.

If that wasn't enough though, we have its own competitors blowing the whistle on them, in an ignored interview the CEO Bobby Lee did, he clearly calls them out for this practice:

There is a lot of mining that goes on in China. However, I caution you: do not read too much into the high trading volumes. China has decent high volumes but unfortunately two of my competition exchanges - I never like saying this - but they are artificially inflating their volumes through the technique of wash trades.
Okcoin and Huobi are known for inflating trading volumes artificially, basically selling from left hand to the right hand.
They use it for bragging purposes. They try to outdo each other. It's not regulated yet so they don't get slapped on the wrist for doing that. China does have big trading but we are not talking about orders of magnitude higher. If you were to believe the numbers you would think the world is 95% Chinese.

The two largest exchanges in bitcoin, OKcoin and Huobi, are lying about how much trading volume they really do. This should be a scandal, but it's par for the course in bitcoinland. Pressure should always be put on exchanges to be honest and transprent, but people should focus on what the real problems are when our "market leaders" are up to no good like this.

OKCoin's ex CTO "CZ" also blew the whistle on their fraudulent trading volume data:

Fake Volumes
I can confirm some of the above bots are designed to pump up volumes. During certain periods, these bots have also been used in a manner to create orders that will only trade against themselves, not with user orders. This mode of operations was strongly resisted by even Chen and Liu (programming, matching engine), but Star Xu insisted on executing it.

Take this as a public service announcement: do not trust OKCoin or Huobi Chinese bitcoin exchange volume, it's mostly fake and is not an indication of anything but how desperate they are to create an appearance of dominance in the market. This is beyond mere speculation, as it has been confirmed by C level executives and top players in the business.

[RealPhotoshoper]

may be easier to read web version: http://www.bitcoinfuturesguide.com/bitcoin-blog/reminder-chinese-bitcoin-spot-exchanges-okcoin-and-huobi-are-faking-a-majority-of-their-trading-volume



To most traders it is common knowledge that Chinese exchanges fake their volume, whether it's OkCoin and Huobi's spot or futures exchanges. Here's an example from Huobi to demonstate the absurdity of the fraud they are committing:



On the 1-day candles you see the volume at over 2.2 Million BTC being traded on Huobi.

And here's the same chart for OKCoin:



Oh no! Only 2 million BTC daily volume on OKCoin. They lose the fake volume competition with Huobi Shame to their family.

Raise your hand if you think OKcoin and Huobi are really trading 4.5 Million bitcoin per day, almost 1/3 of the current supply:



So we don't even need any more information than this to know that they are committing fraud in their trading volume. Taking 1,000 BTC and trading it between two exchange accounts at 0% fees and reporting it like it's a normal transaction would be a criminal offence in any regulated environment.

If that wasn't enough though, we have its own competitors blowing the whistle on them, in an ignored interview the CEO Bobby Lee did, he clearly calls them out for this practice:

There is a lot of mining that goes on in China. However, I caution you: do not read too much into the high trading volumes. China has decent high volumes but unfortunately two of my competition exchanges - I never like saying this - but they are artificially inflating their volumes through the technique of wash trades.
Okcoin and Huobi are known for inflating trading volumes artificially, basically selling from left hand to the right hand.
They use it for bragging purposes. They try to outdo each other. It's not regulated yet so they don't get slapped on the wrist for doing that. China does have big trading but we are not talking about orders of magnitude higher. If you were to believe the numbers you would think the world is 95% Chinese.

The two largest exchanges in bitcoin, OKcoin and Huobi, are lying about how much trading volume they really do. This should be a scandal, but it's par for the course in bitcoinland. Pressure should always be put on exchanges to be honest and transprent, but people should focus on what the real problems are when our "market leaders" are up to no good like this.

OKCoin's ex CTO "CZ" also blew the whistle on their fraudulent trading volume data:

Fake Volumes
I can confirm some of the above bots are designed to pump up volumes. During certain periods, these bots have also been used in a manner to create orders that will only trade against themselves, not with user orders. This mode of operations was strongly resisted by even Chen and Liu (programming, matching engine), but Star Xu insisted on executing it.

Take this as a public service announcement: do not trust OKCoin or Huobi Chinese bitcoin exchange volume, it's mostly fake and is not an indication of anything but how desperate they are to create an appearance of dominance in the market. This is beyond mere speculation, as it has been confirmed by C level executives and top players in the business.

i also ever see about fake volume on bitcoin exchange,so i'm nt wondering about this,and not worry,i'm not use okcoin or huobi,even Bobby Lee said like that,its normal i said.

[Slowturtleinc]

Not a good look for the sites, bragging rights are one thing but the optics are really bad. What else are they doing!

[LFC_Bitcoin]

Exchanges faking volume isn't a new thing guys. They've been doing this kind of stuff for a long time.

[Zeke2345]

Exchanges faking volume isn't a new thing guys. They've been doing this kind of stuff for a long time.

If this is common knowledge to people, why would people trade in a fake market?
Its one thing to have whales moving the market, but the exchange too is murky.

[Wapinter]

Exchanges faking volume isn't a new thing guys. They've been doing this kind of stuff for a long time.

If this is common knowledge to people, why would people trade in a fake market?
Its one thing to have whales moving the market, but the exchange too is murky.

It is definitely a bad business practice but since bitcoin is not regulated,it is easier for exchages to fake their trading volume.
On a different note I think it is good that these exchanges with their fake volume,doesn't let bitcoin price fall too much

[cazkooo]

It is not really faking volume when there is no trading fee there. Anyone can just buy and sell everything there without having to worry about the fee therefore the volume in most chinese exchangers are generally higher than the other exchanger. However no one really can tell if they are responsible for that or generally it is done by their traders

[gentlemand]

He spoke of this long ago too. Is there any need to fake when your customer bots will happily fill the gap? I guess he's going to know better but the very way they're set up is going to foster silly and largely irrelevant non falsified volumes.

[Jordan23]

Lots of fake shit comes from China. Half their rice is fake.

[QuestionAuthority]

I'm confused, is this supposed to be new information?

[pumawolf]

Lots of fake shit comes from China. Half their rice is fake.

try  some of their eggs , u crack an egg to make an  breakfast  omelette,  water comes out.

[DimensionZ]

I don't completely understand why they are manipulating the Bitcoin trading volume. Aside from the bragging rights of having the most fake trades what kind of advantage will this bring to OkCoin or Huobi? Will they get more real customers that way for being on the top?

[lumeire]

I don't completely understand why they are manipulating the Bitcoin trading volume. Aside from the bragging rights of having the most fake trades what kind of advantage will this bring to OkCoin or Huobi? Will they get more real customers that way for being on the top?

If you and I are normal traders with little volume, we would want an exchange wherein there's constant fluid movement, because that's where opportunity is. Same goes here, they're trying to attract day traders.

@ontopic Even without this fiasco China still has the highest trade volumes, so yeah, It doesn't matter.

[cazkooo]

I'm confused, is this supposed to be new information?

No to some people while yes to the others

I don't completely understand why they are manipulating the Bitcoin trading volume. Aside from the bragging rights of having the most fake trades what kind of advantage will this bring to OkCoin or Huobi? Will they get more real customers that way for being on the top?

The fake high volume will encourage more people to trade at their platform because people might consider it as a high trading activity platform thus at the same time increasing their userbase as well as their statistic of the site , and of course to get more revenue from this activities

[NorrisK]

Quite well known that this is going on on those exchanges. No trading fees and massive volume equals massive selling between peoples own hands.

The good thing though is that it does increase liquidity somehwhat, as there need to be orders on the books to be able to trade with yourself, however brief it may be. There is also probably a lower spread there as orders are crawling up to eachother to be able to bid to one self.

Just don't get drawn by massive trading volume as an indicator of a successful exchange in this case and you will be fine.

[SFR10]

This is a disgusting move done by those exchanges and in a way is cheating to gain more attention, in order for more usage. It's an act of dishonesty and yet they still get to operate in the industry. It always starts from these types of problems that will give freedom for them to do other dishonest and criminal moves in the end. "When the root has been damage, don't expect it's outcome to be nice in the future".

[Kakmakr]

This is why sites like Preev.com excludes them from determining the average Bitcoin price. They use sources like, Bitfinex & Bitstamp & BTC-E. It is known that Chinese exchanges are manipulating the trade volumes and people do not take them seriously anymore, or should I rather say they are ignoring this on purpose. Things like this happens in countries where regulation is not in place to restrict these actions or to make it a criminal offense. Just do what the other people do, and write them off as a credible source for any exchange related statistics. ^smile^

[Amph]

I don't completely understand why they are manipulating the Bitcoin trading volume. Aside from the bragging rights of having the most fake trades what kind of advantage will this bring to OkCoin or Huobi? Will they get more real customers that way for being on the top?

they can instigate an easy pump and dump, with fake trade, it's a form of manipulation

[onlinedragon]

Ridiculous that a good exchange need false volumes to lure people. Good that someone made this info publicity maybe the good and honest exchanges need some more attention instead of the fake exchanges.

[mkc]

If you have 1 coin, you can buy at 429, sell at 432. Then buy back 429, sell 432. I mean you can do this 5 times a day and counted as 10 coins traded.
I don't see much problem with it.