Fake volume in exchanges

[DirectContract]

Found an interesting article in which one guy did some datamining on some popular exchanges and their volumes:

https://medium.com/@sylvainartplayribes/chasing-fake-volume-a-crypto-plague-ea1a3c1e0b5e

Apparently a few of these giants are falsifying their volumes. Maybe because a higher market cap would make people think it's a more trustworthy exchange? I don't know if it's really worth going through all of that effort.

Would this have a major effect on the prices? I know we used to see huge differences in prices in the past, but now you won't see much more than a few percent here and there between exchanges.

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[Coinblaze]

This is disturbing, it makes the case for regulated exchanges...

It doesn't affect the market cap or price directly, but higher volumes can have a few effects:

All these new exchanges are looking to attract new customers, so they try to fake their volume to appear higher in lists of top exchanges.

Altcoins too will try to pump up their daily volume to try to appear to be a good and stable coin.

Scammers trying to make a coin appear to be good or bad can generate a steady stream of fake buy/sell to themselves to try to push the price in the direction they want.

The moral of this story is: don't trust the volume!

[stompix]

Old news and everybody that bothered researching the exchanges for 5 minutes before trading there knows it..
Already discussed a thousand times.....

https://bitcointalk.org/index.php?topic=3173184.0
https://bitcointalk.org/index.php?topic=3173106.0
https://bitcointalk.org/index.php?topic=4505046.0
https://bitcointalk.org/index.php?topic=1747868.0
https://bitcointalk.org/index.php?topic=1438396.0

[jmesfisher]

Found an interesting article in which one guy did some datamining on some popular exchanges and their volumes:

https://medium.com/@sylvainartplayribes/chasing-fake-volume-a-crypto-plague-ea1a3c1e0b5e

Apparently a few of these giants are falsifying their volumes. Maybe because a higher market cap would make people think it's a more trustworthy exchange? I don't know if it's really worth going through all of that effort.

Would this have a major effect on the prices? I know we used to see huge differences in prices in the past, but now you won't see much more than a few percent here and there between exchanges.

interesting, but many of that volume is caused by bots... you just have no time to react, and your PC has no way how to display that on time ))) but yeah there are exchange that are really abusing with fake volume, my personal best is bitforex )))

[bob_rushford]

Each exchange has there specific whale traders who are bound to fill in the volumes as per their interest and the trends they want to show. Also bot trading is a practice.

[franky1]

This is disturbing, it makes the case for regulated exchanges...

It doesn't affect the market cap or price directly, but higher volumes can have a few effects:

All these new exchanges are looking to attract new customers, so they try to fake their volume to appear higher in lists of top exchanges.

Altcoins too will try to pump up their daily volume to try to appear to be a good and stable coin.

Scammers trying to make a coin appear to be good or bad can generate a steady stream of fake buy/sell to themselves to try to push the price in the direction they want.

The moral of this story is: don't trust the volume!

you forgot to add if an exchange only does say 200btc volume a day thats usually only 1btc in fee's. no VC is going to buy shares in the the ownership of an exchange that only makes 1btc a day. so some exchanges fake volumes, not to make a coin look good. but to grab some VC money

its also not just exchanges. its wallet custodians faking the 'new walet' per day stats to make it seem that its a good VC prospect for advertising income of a nice increasing customer views site

[DirectContract]

This is disturbing, it makes the case for regulated exchanges...

It doesn't affect the market cap or price directly, but higher volumes can have a few effects:

All these new exchanges are looking to attract new customers, so they try to fake their volume to appear higher in lists of top exchanges.

Altcoins too will try to pump up their daily volume to try to appear to be a good and stable coin.

Scammers trying to make a coin appear to be good or bad can generate a steady stream of fake buy/sell to themselves to try to push the price in the direction they want.

The moral of this story is: don't trust the volume!

you forgot to add if an exchange only does say 200btc volume a day thats usually only 1btc in fee's. no VC is going to buy shares in the the ownership of an exchange that only makes 1btc a day. so some exchanges fake volumes, not to make a coin look good. but to grab some VC money

its also not just exchanges. its wallet custodians faking the 'new walet' per day stats to make it seem that its a good VC prospect for advertising income of a nice increasing customer views site

Yeah and the fake growth gives the exchange more chances for expanding out and building its brand in other sides of the industry as well and market themselves on every corner of the web. Next thing you know they could be doing ICOs and making their own coin. Then they give people commission discounts if they use their coin... like Binance.

It's not an immediately negative effect on prices, but it's a long term draw out. Kind of like buybacks on the stock market, they're just inflating their own value, but this way their doing it with hot air instead of real money.

[sufiasyl]

The key is never to get drawn to the price of the coins. We need to see the demand in order to determine if it is real or a scam. These sort of incidents are sad indeed to witness. The investors need to be on edge to be safe.

[InboundMercury]

These exchanges are built on a unregulated space with a lot of loopholes in them. So, we cannot really do anything about it. It is an unfair practice and very frustrating for the community but if you follow web articles closely, you'll see that these accusations are mainly against OKEx, Bitfinex and Kraken. However, GDAX and Binance are still reliable for the users as they were more accurate

[TupMan007]

As far I understand it does not influence the market cap on price straightly. I think higher volume have a number of like all pull towards to new customer. Scammer always try to make a coin appear to be good.

[Beity]

It’s very irritating for those who faced this problem. But if anyone be careful about that they should avoid this.

[WolfRisk]

Partially disappointing! We should always be aware of such kind of exchanges. We should observe market behavior that will help us decide the right.  In crypto world, we should always be dependant on ourselves rather than what others say. Cautiousness is the best key to be successful here.

[12tribes]

Whale-like activities are readily possible to manipulate potential investors, push prices of the coins they trade bullish and equally do so to have a large volume appearance. Bots are quite known to repeat activities of a single transaction making it look as real timetransactions, however a careful analysis of the situation shows that this indeed may be a bad turn for crypto and thus give the naysayers what is a long hook to catch the bitcoin and give it a bad name.  On the all I think this is only on a few desperate sites.

[rahimali]

I don't think there's much we can do about these exchanges since none of them are regulated. However, you can still try well know exchange like Binance, majority of the community already doing transactions there and they don't have any accusation of infating their volumes on them.

[bartolo]

you forgot to add if an exchange only does say 200btc volume a day thats usually only 1btc in fee's. no VC is going to buy shares in the the ownership of an exchange that only makes 1btc a day. so some exchanges fake volumes, not to make a coin look good. but to grab some VC money

Not only that, the higher the volume, the higher the listing fee they will charge for listing any new token or coin in the exchange.

[cryptoJJJ]

Fake volume, gets more people to sign up to trade with the exchange bot. But fake volume is also getting new coins to sign up and pay a heavy signup fee, hoping the exchange will add more volume to their coin.

[pixie85]

The article focuses on OKex exchange. I have never used it, have you? It's trying to fight for first place in volume with Binance and with the high volume that they have it's really easy to hide some fake trades. Chinese exchanges were doing that in the past and this was one of the reason why they were banned and had to move somewhere else like Hong Kong.

[abderrazak belkhir]

The scam now is everywhere in the crypto world you must not be surprised if you see somthings like this...i think the crypto world need really people who know this world really and They can punish these traitors

[squatter]

These exchanges are built on a unregulated space with a lot of loopholes in them. So, we cannot really do anything about it. It is an unfair practice and very frustrating for the community but if you follow web articles closely, you'll see that these accusations are mainly against OKEx, Bitfinex and Kraken. However, GDAX and Binance are still reliable for the users as they were more accurate

Maybe GDAX -- I think they mostly play by the book. I've also seen some analysis of Bitfinex trading metrics that suggest they are mostly legitimate too.

But Binance's volume is likely manipulated. I follow lots of traders on Twitter and many people suspect fake volume because of the lack of order book depth. Same accusations you see towards OKEx. And remember, CZ was the mastermind of Okcoin and Okcoin futures trading engines, which were notorious for faking volume. You think he wouldn't work that magic at Binance, too?

[dreamhouse]

I think all exchanges do that, especially those formed by Chinese. They are good cheaters as always. Just look at the top 20 exchanges (especially those in altcoins) how many are from them and how many we never heard the names before. It is trivial to create a bot to do auto tradings.