Obviously there's no way of knowing, but it's rather more important to know who's wash trading. If it's the actual customers then I'm not too bothered. That's what enough assholes do already.
If it's purely the exchanges themselves, and I'll guess most of the time it is, then that's much more odious.
why is that? with volume pumping, i figure the exchanges are just trying to exaggerate volume and liquidity to attract more traders. some relatively innocuous algorithm that amplifies volumes without necessarily manipulating the market much (since everything is amplified).
if traders are doing it, i assume their intention is always bad. rationally, there's no reason for traders to engage in that behavior unless they are trying to manipulate price.
Exchange transactions do not happen on the blockchain. Therefore exchanges do not need to wash trade in order to pump volumes. They can simply inject fake transactions into the trade log. Internally they mark the fake ones so they don't get counted in their accounting. Externally you see it as a transaction.
Without external auditing of their systems and oversight, centralized exchanges are free to do whatever they want and if they really wanted to these fake volumes would be virtually undetectable or impossible to prove.
