Why do exchanges get away with faking trade volume?

[NotATether]

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned. And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

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[Charles-Tim]

Does anyone else agree that it's way too easy to open an exchange nowadays,

It is not easy to open a safe and reputed exchange, but can be easy for scammers to set up a fake exchange.

And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

There are scam in forex too but no opportunity to create new fiat money as all are centralized and owned by countries. Unlike, cryptocurrencies, they are decentrlaized and can be created by anybody, that is why some are subjected to pump and dump.

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

That does not mean it is not happening in forex, a lot of scams that happen in crypto is occuring in forex too

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Imo, if you are talking about centralized crypto exchanges, they are also well regulated but there are some ways scam can be legit, a good example is the puming and dumping of coin. Aside forex, let me use a well reguated organization for you, have service sim provider scammed you before? They can scam people with as little as $0.1 dollar, why government never done anything?

Imo, not that crypto exchanges are not regulated, there are shady scam in forex too and it is everywhere like that. It is we that should be careful.

[Jating]

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned.

Compliance to who? but I would agree that it is very easy because no one will audit your trading platform.

And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

And as much as we hate this fraudulent practice, this is open and free market. No central authority to manage this exchanges.

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Again, still boils down to crypto being unregulated. And there are people who are going to exploit it as there are no regulations and it is based on "trust". So the best weapon is to really check out the exchange that you want to use.

And there is this website: https://www.bti.live/. You can used it as a reference.

[NotATether]

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned.

Compliance to who? but I would agree that it is very easy because no one will audit your trading platform.

That's the problem. There is no regulatory body set up for monitoring cryptocurrency exchanges, or bodies that I know of who have expanded their operations to crypto exchange monitoring within their own country. Just like there are regulators like ASIC and CySEC that monitor their own countries' exchanges, they should at least include crypto exchanges operating in their country.

This brings something to mind. With many scams posing as exchanges displaying a UK company license on their site, how come the FCA isn't monitoring them?

[GreatArkansas]

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned.
(....)

Kind of easy, but the difficult here are the users will use your exchange for sure, especially your exchange is kinda new and not popular, especially there are lot of old exchanges that are popular and trusted for how many years by some people.
About this faking the trade volume, it's now become natural and common for some people, because whatever the exchange reported, that's what we believe, right? So, we should not always believe on those numbers.

[gentlemand]

It wouldn't matter if 199 countries set up the most exquisite regulation in existence, if the 200th doesn't that's where all such places will end up. Most customers won't know any different, or care.

This is a symptom of the medium it lives on. It ain't changing. There'll always be enough morons who run straight into the arms of these fuckholes. The best thing that can happen is that the best platforms keep improving.

[thesmallgod]

The question is who will regulate them ? Many of this exchange are new exchange platform that exchange listing of shitcoin for new traders but get stuck in continuous listing of bad project. They also fake volume to rank higher in coinmarketcap and other crypto trading monitoring sites. Unless people stop patronizing them, they will never stop this. Some of them don't even have physical address which make it difficult to even sue or get then regulated

[elda34b]

With many scams posing as exchanges displaying a UK company license on their site, how come the FCA isn't monitoring them?

Maybe you should ask the FCA then. I honestly doubt that license holds any meaning since I see many wallet acquired the license to run digital wallet services, so not exactly implying that the regulators would monitor their activity. But this thing will gradually slow down when countries begin taking crypto seriously. After all, this industry is still very young, not even 20 years old yet.

[jrrsparkles]

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned. And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Exchanges with more volumes will attract more traders that is why we see fake volumes but exchanges report fake volumes are easy to find but most of the legit exchanges do it via wash trading so they make it  look like legit trading activities going on there.Anyway regulating is not going to be easy because still many governments not aware of their existence so they are taking advantage of it.

[mk4]

It's pretty simple: because a lot of  those scammy ones are unregulated or regulated in shady countries. And like you said, they can buy the software, and simply modify the UI/UX to their liking to make it "unique" enough. They're just easily getting away simply due to the pseudonymous nature of cryptocurrencies. If we're going to compare them to other finance platforms, of course the finance platforms would easily get screwed because most of them needs banking.

[Yamifoud]

...
And then other exchanges blatantly misreport their trading volume as much higher than it actually is.

It was a big attraction for any exchanges. Huge trading volume exchanges are what traders had looking at this time and it is very unfortunate how these exchanger's owners want to take that opportunity and to lie people around. It is to imagine how money works, paid those reviews just to be good to look at but behind that reviews, it finds different from the actual scenario. That is why I don't rely on reviews but rather to try and to find out.

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Well, that regulation will give some help to stop these fake volume and illegalities but I don't know how it affects the market reputation since almost all exchangers do that, even those reputable exchanges may have that kind of troubles.

[buwaytress]

It is too easy. And that is a problem, and I think we are always faced with the dilemma all across the sectors in crypto. Trading, exchange, gambling, mixing, basically any service, not only trading...

What should we do? Fight for more consumer protection, so more licensing and more regulation? But Huobi, Bittrex, Coinbase, are all regulated just in different jurisdictions and all have been or are guilty of wash trading.

And what precisely are the boundaries for wash trading anyway?

Protect all you want but until people actually stop using meaningless numbers to make their decisions (and we know people are dumb), I feel it's all pointless.

You'll always be lagging if you play that game. Better to educate, spread awareness, disseminate information, weed out misinformation. Support good data, flag bad ones.

Can't save all the idiots.

[adzino]

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned. And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

There are forex scam platforms! Most of them work as a ponzie and pyramid schemes. And they usually end up scamming money from people and then running away. Most of them do get caught and receive penalties and punishments.
The same thing happens in crypto exchanges. They make a fake exchange and report fake volumes. They list shitcoins because they get paid for it. It is the responsibility of the user to choose a legit platform and avoid those scam exchanges.

[rexxarofmoknathal]

It is too easy. And that is a problem, and I think we are always faced with the dilemma all across the sectors in crypto. Trading, exchange, gambling, mixing, basically any service, not only trading...

What should we do? Fight for more consumer protection, so more licensing and more regulation? But Huobi, Bittrex, Coinbase, are all regulated just in different jurisdictions and all have been or are guilty of wash trading.

That's the limbo we're all facing. Many crypto sectors could get away without complying to any regulations because there's no requirement but then we users should know better right? And that's why forums like these exist.

This is not to say that all platforms are meddling with numbers and such but the prevalence is high. Consumer protection and licensing might unravel a new hole shite pile of trouble at least when done traditionally, but this is something many finance sectors are dealing with - its not easy.

The bottom line is to always be protective over your money no matter in which platform it goes into. Oh yeah, and read the small prints!

[The Sceptical Chymist]

If a stock were to do this, their owners would go to jail.

Indeed they would, but I think it would be a lot harder to try to set up a fake stock brokerage these days than it would be for a crypto one.  Stock market investors tend to stick with the brokers with big names and long track records, and I don't think many of those investors would be willing to try out a new broker.  Also I think these fly-by-night crypto exchanges operate out of countries where there's little regulation, which is why they can get away with some of the shit they pull. 

It amazes me that exchanges like Yobit are still around, given some of the garbage coins they offer, some of which probably don't even exist.  Obviously no government regulator is paying attention to them, or they don't care.

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Again, I think this is a function of what country the exchange is operating out of.  It's also partly a problem of the websites that report that volume data, like CMC and coingecko.  Doesn't seem like there's a lot of fact checking going on.

Crazy that crypto is over ten years old and we're still kind of in the wild west days as far as these things go.  I don't think it's going to stay like this forever, but it sure as hell is interesting to see while it's happening.

[RapTarX]

Exchanges do not directly report fake volume rather they use bot trading which increases their volume at the end of the day. However, there's none much of regulatory body who could look at deeply.
However, there's metric in crypto tracking sites like coinmarketcap by which one can easily detecr whether exchange is using fake trading.

[figmentofmyass]

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned. And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

i actually don't mind. i've been around in this space long enough to easily sniff out scam exchanges and fake volume. i am more so mystified at how noobs always seem to end up on these unknown scam exchanges that are clearly faking volume and have no real liquidity. why? how? why don't they do any research on the exchanges they are entrusting their coins to?

it's too bad we live in a nanny state society where investors feel no need to do due diligence in their business relationships and investments. tbh, the truth is that most noobs need to get scammed once or twice before learning their lesson. there's no way around it IMO.

Exchanges do not directly report fake volume rather they use bot trading which increases their volume at the end of the day.

lots of exchanges completely fake volume and liquidity. they spoof orders on both sides and use algorithms to multiply the reported volume vs actual volume traded.

exchanges can't easily use bots to pump volume with real trades. that's a very quick route to insolvency since real traders would be eating up their "fake" liquidity.

[LUCKMCFLY]

It is not that it is very easy to open an Exchange, what happens is that Exchanges are a great business model, the advantage is that you can see all the positions, stops, resistances and supports, having that information is very easy to do some win-win movements, and not counting the different plans offered to Market Makers.

[Oilacris]

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned. And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Thats because cryptomarket is not really that heavily regulated.You wont need any permits  or wont really be that necessary for someone to create their own platform.

This is why people should really be careful on because we know that once transactions had been done like depositing then it cant be reverted nor can be traced

when the owners of such exchange tends out to ran all of the investors money and thats one of the few main reasons.

[rodskee]

That's because crypto market is not really that heavily regulated. You wont need any permits  or wont really be that necessary for someone to create their own platform.

Yeah and like what OP have mentioned, You just need to form a team and buy 3rd party
system, with decent fund you are good to go.

This is why people should really be careful on because we know that once transactions had been done like depositing then it cant be reverted nor can be traced

Research and find more information about exchange that you'll going to use, it's frustrating
losing your money in such kind of act.

when the owners of such exchange tends out to ran all of the investors money and that's one of the few main reasons.

Pain in the ass once the owner run away and bring all the money with them, no regulation
and no trace, they will just disappear.