Do exchanges manipulate order books, add fake transactions?

[capoeira]

what they probably most do is front-running

[BitcoinHodler]

one of the sources of  income that many exchanges have which is the only source of income for some of them is this exact manipulation that they do of the markets and the orderbooks.

it is a bit hard to catch sometimes especially if the site is good at hiding it but eventually it is not impossible to detect since everything is already available publicly on the charts and the trade history.

[Doamader]

One thing i know at all exchanges there are bots, a friend mine, a coder just made a bot to poloniex, something i thinked werent possible, soo the biggest exchange allows bots, even with their big security level, soo for sure all exchanges does have their bots to make a coin fly and without make them loosing money, fees will stand with the house and the bots for sure get some easy income allong the pumps and dumps of altcoins these days.

[davis196]

How do I know, all orders in the order books are real?

The one who owns server server could easily add some fake orders. As well as add some transactions under last transactions that did not actually happen.

Why? To manipulate the market. To cause artificial pumps. They can buy any time and cause a pump anytime. Then dump for profit. I guess, this works best with smaller capitalized coins? (With big coins, I suppose, if there are at least a legit exchanges, few people would fall for the fake pump.)

This should be very tempting for the owners of an exchange since it's low risk and kinda a money printing machine?

Let's take for example yobit. No names. No faces. I have no way to verify their identity. If I had coins there and they run, I had probably no legal means either?

All the cryptocurrency exchanges are out of regulation and nobody controlls them.

This is a huge risk for all the people with btc deposits.

I wish there was a way to make those exchange platforms more transparent.

[Fatanut]

Faking transactions might just lead to confusion on their end and that would even lead to loss of profit. I think everything on exchanges are automated. All the buy and sell are automated and they have nothing to do but do some maintenance every now and then. They will earn money even if they don't cheat on traders because of the transaction fee. Every single second there's money that's coming to them.

TL;DR: They can do it but they have not enough reason.

[gentlemand]

TL;DR: They can do it but they have not enough reason.

I seem to remember someone ex OKcoin saying the exchange had its employees trading away with accounts provided for them. No idea whether that's just bitter lies of course.

[redsun114]

I believe an exchange might reserve the rights to fill up the gaps in order books so that they will attract more traders as every trader will be preferring to go with more trading volume occurring exchanges.

Moreover, filling up gaps in order books is a common practice by many exchanges as it will help their business to grow.

[Fatanut]

TL;DR: They can do it but they have not enough reason.

I seem to remember someone ex OKcoin saying the exchange had its employees trading away with accounts provided for them. No idea whether that's just bitter lies of course.

It's also possible that their employers wanted to do a TLC (thinking like customer). The only way that you can do that is to use your service/product itself even if you're just going to end up playing by yourself. If you lose money trading on your own exchange site, it's okay because it is yours anyway.

Maybe they are just testing their website and they are looking for possible bugs. You know, experiencing the very thing that they created. It's quite hard to trust someone to test your website and give honest feedback so why not use your employees themselves, right?

[electronicash]

Of course they do have enough reason to manipulate, money is the best motivation for them. Its probably one of the reason why they create an exchange. Some exchange sites even create their own coin such as yovi.

[Red-Apple]

Faking transactions might just lead to confusion on their end and that would even lead to loss of profit. I think everything on exchanges are automated. All the buy and sell are automated and they have nothing to do but do some maintenance every now and then. They will earn money even if they don't cheat on traders because of the transaction fee. Every single second there's money that's coming to them.

TL;DR: They can do it but they have not enough reason.

they don't make fake transactions for manipulations, it is all in the orderbooks and the history of trades. some times in some of the more crappy exchanges with lazy owners who want to manipulate you can actually see this and recognize their fake orders.

but in some of the bigger exchanges like poloniex or those big bitcoin exchanges it is so much harder to figure out because they are good at hiding it too.

[Superbitzz]

i think it is not such an easy job, and specially in such an organize kind of currency, which is most favourite currency of the world and becoming more and more stronger day by day.

[JeffBrad12]

i think it is not such an easy job, and specially in such an organize kind of currency, which is most favourite currency of the world and becoming more and more stronger day by day.

I don't think if that is a difficult job because the exchange just needs for adding a fake transaction, like using bot pumping, some exchange is using bot pumping for making like the cycle of exchanges is very fast.

[wintermeasures]

How do I know, all orders in the order books are real?

The one who owns server server could easily add some fake orders. As well as add some transactions under last transactions that did not actually happen.

Why? To manipulate the market. To cause artificial pumps. They can buy any time and cause a pump anytime. Then dump for profit. I guess, this works best with smaller capitalized coins? (With big coins, I suppose, if there are at least a legit exchanges, few people would fall for the fake pump.)

This should be very tempting for the owners of an exchange since it's low risk and kinda a money printing machine?

Let's take for example yobit. No names. No faces. I have no way to verify their identity. If I had coins there and they run, I had probably no legal means either?

Yes Bro Its Possible that A Website Do This But If You Are Using a Legit and Realible Website Then I Can Tell You That a Legit Website Can't Do This Because They Don't Want to Loss Their Trust and Their Users.....
I am Using Yobit.net And Poloniex.com And I Don't Think That these Website Do These Type Of Things With Their Users......

[mirakal]

How do I know, all orders in the order books are real?

The one who owns server server could easily add some fake orders. As well as add some transactions under last transactions that did not actually happen.

Why? To manipulate the market. To cause artificial pumps. They can buy any time and cause a pump anytime. Then dump for profit. I guess, this works best with smaller capitalized coins? (With big coins, I suppose, if there are at least a legit exchanges, few people would fall for the fake pump.)

This should be very tempting for the owners of an exchange since it's low risk and kinda a money printing machine?

Let's take for example yobit. No names. No faces. I have no way to verify their identity. If I had coins there and they run, I had probably no legal means either?

Yes Bro Its Possible that A Website Do This But If You Are Using a Legit and Realible Website Then I Can Tell You That a Legit Website Can't Do This Because They Don't Want to Loss Their Trust and Their Users.....
I am Using Yobit.net And Poloniex.com And I Don't Think That these Website Do These Type Of Things With Their Users......

That's right, there is no reason for them to manipulate when they are already earning, a trustworthy website will attract customers and clients and when there is a big volume of traders the exchange sites are making good money.

[coinzat]

any exchange can fake orders and fake volume easily.but for bitcoin, it is hard to manipulate the price because there are many other exchanges out there. it is not one single exchange like some altcoins have

[Rostadom]

They will be playing with themselves if they do that. Maybe if a dev of a certain altcoin contacts them to manipulate order books and add fake transactions, they will do it for money. Otherwise, doing all of those stuffs will just be a waste of time and effort because at the end of the day, they are not going to earn any money at all.

I don't know that for sure, just pure thinking. Maybe there are some stuffs like this happening but it's just that it's not a good way for exchange sites admins to spend their time.

[BitHodler]

They will be playing with themselves if they do that. Maybe if a dev of a certain altcoin contacts them to manipulate order books and add fake transactions, they will do it for money. Otherwise, doing all of those stuffs will just be a waste of time and effort because at the end of the day, they are not going to earn any money at all.

I don't know that for sure, just pure thinking. Maybe there are some stuffs like this happening but it's just that it's not a good way for exchange sites admins to spend their time.

Exchanges have no other choice than to add fake orders to make the spread between buy and ask as small as possible.

If they don't do it, then the gap between certain price levels will be too big, where even a tiny executed sell order in potential can get the price to drop with 1% or so.

They want to attract traders with well stacked order books, so yes, they will continue doing so.

[Shiroslullaby]

I seem to remember someone ex OKcoin saying the exchange had its employees trading away with accounts provided for them. No idea whether that's just bitter lies of course.

There were multiple sources from OKcoin employees saying they were told to move coins around just to make the volumes look higher.
Probably when the site first started to generate traffic and make it look more popular and encourage more people to trade there.

Its obvious if you look at any exchange and pick a coin with high volume, there are tons of bots doing trading.
Who is running these bots and for what reason is hard to say.

[Daisy14]

I can't say if exchanges fake volume or not but even if they do, I believe you should be able to sell your coins and get your money even if you are trading with a bot.

[Pursuer]

I can't say if exchanges fake volume or not but even if they do, I believe you should be able to sell your coins and get your money even if you are trading with a bot.

manipulation have a lot of different forms.
it can be a simple popular way of manipulation by pumping a coin, which is good and we can all use to our own advantage.
but the manipulation can be in other forms like showing fake orders and fake walls to move the market in one direction or the other and this can be against what we want most of the time.