Woahh Is This Stuff Even Legal??

[astaroth81]

Hi guys I'm new here and pretty new to crypto and trading in general. Read a book by Nik Patel which led me here and also gave me the strategy of looking up tokens via etherscan and I must say some of the stuff I see going on just doesn't make sense. Like this address for example holding $vgx.

 He keeps sending hundreds of thousands of coin back and forth to himself nonstop from Coinbase to Binance then back to Coinbase. I think he's just sending it not selling it so it wouldn't affect price would it? If not, then why keep doing it?

Any financial institution or government agency would immediately flag this type of movement as suspicious and think it were money laundering etc. Really curious to know what this is, thanks!

https://etherscan.io/token/0x3C4B6E6e1eA3D4863700D7F76b36B7f3D3f13E3d?a=0x7ecccabb5e4ff4537f70b0a5018e8c0cfd53fff4

[1714938484]

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[noorman0]

There is no 100% correct answer unless you find the owner and ask directly. Both exchanges are stricter on KYC issues than the others, in conclusion they are more sensitive to illegal activities.

My crystal ball analysis mentioned, looks like this guy is doing arbitrage trades (probably) using a platform so that withdrawals and deposits are done automatically. To further substantiate the reason, I looked at the price chart of the token and maybe you will think the same.

https://coinmarketcap.com/id/currencies/voyager-token

[hugeblack]

If not, then why keep doing it?

I think it is a mechanism to provide liquidity, I do not have information on how the symbol works, but some symbols do this to provide liquidity or maintain price stability, especially if there is another pair to trade (such as stablecoins and their pairs)

Most of these projects are central so it is better to focus on top 10 of smart contract tokens and how they work.

[PrivacyG]

Maybe the owner is someone who is actively trading coins and is only holding VGX short term for profits.  In that case, they could be sending back and forth between Binance and Coinbase to actively trade VGX for other Altcoins and return to VGX once profit is made.  This only makes sense if they are trading coins on Binance for VGX that are not available on Coinbase and vice versa.  Just my speculation, like any of the above answers.

VGX should have a Telegram group.  Have you considered asking over there or moving this topic to Altcoin Discussion?  They could have a much more accurate answer.

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Regards,
PrivacyG

[Dunamisx]

He keeps sending hundreds of thousands of coin back and forth to himself nonstop from Coinbase to Binance then back to Coinbase. I think he's just sending it not selling it so it wouldn't affect price would it? If not, then why keep doing it?

Base on how i understand this, i think he engage in trading which is almost on a continuous process, this action of transfer of coins frequently from one account to another is mostly common to crypto traders, sone of them take positions in day trading or swing trade and make transactions frequently to users, they buy and sell coins at a favourable price and sell to realize profit, if you're close to the person you would discover that his trading is not only tied to one user account, he perform such with different users who got offers from him and make a buy, then they exchange coins as well to make more opportunities out in trading, they hold less and sell fast.

[Saint-loup]

There is no 100% correct answer unless you find the owner and ask directly. Both exchanges are stricter on KYC issues than the others, in conclusion they are more sensitive to illegal activities.

My crystal ball analysis mentioned, looks like this guy is doing arbitrage trades (probably) using a platform so that withdrawals and deposits are done automatically. To further substantiate the reason, I looked at the price chart of the token and maybe you will think the same.

https://coinmarketcap.com/id/currencies/voyager-token

Usually when you do arbitrage trading between 2 exchanges you keep a swap reserve of the 2 coins on both exchanges to avoid withdrawal fees and being able to make the arbitrage trades more quickly, you only make transfers when your reserve starts to become too low on one exchange. It must be a whale if it is able to make so much withdrawals and still being in profit.

[Bitcoin_Arena]

I have some doubt when i look at market price though. At this moment[1], the price on Binance is $0.5117 (VGX/USDT) while price on Coinbase is $0.514 (VGX/USD). The difference is only about 0.45%, so it's hard to perform arbitrage unless your account trading volume is extremely high where Coinbase maker/taker fee is 0%/0.05%[2] while Binance maker fee is 0.02%/0.04%[3]. You also need to consider withdraw fee which isn't cheap on ETH network.

If indeed he's doing arbitrage, he would still be making profits.

Looking at the current balance of tokens in his address, there are some 1,161,751.89834346 VGX that's approximately $580,000 and this is minus the tokens that are still in the exchanges. He could easily hit over $1M

The seemingly small price difference is very likely to get him some reasonable profits, as you can see he keeps doing it repeatedly. Who knows, he could be seizing opportunities where the price difference opens up to even over1% otherwise if the ETH network fee is the issue, it makes no sense moving coins in and out of the exchange without any trading.

[dansus021]

There is no 100% correct answer unless you find the owner and ask directly. Both exchanges are stricter on KYC issues than the others, in conclusion they are more sensitive to illegal activities.

My crystal ball analysis mentioned, looks like this guy is doing arbitrage trades (probably) using a platform so that withdrawals and deposits are done automatically. To further substantiate the reason, I looked at the price chart of the token and maybe you will think the same.

https://coinmarketcap.com/id/currencies/voyager-token

I would say the same , and arbit trade is not illegal. I mean the exchane need arbitrary trade to keep the price same with other exchange or keeping the price stable.  Any other reason maybe they want the coin looks active (have transaction going on)  in explorer

[Darker45]

This is weird. And we can only guess what the owner is really up to.

But I can hardly imagine doing arbitrage with VGX on Binance and Coinbase this way. It's too inconvenient, too time-consuming in a game which values even seconds, and too costly. If I play arbitrage with VGX on both exchanges, I would have VGX kept in both exchanges so that I won't have to make a huge deposit and withdrawal every once in a while. That would also keep me away from the curious eyes of these centralized exchanges' staff.

[cryptoaddictchie]

Who knows what activity now they have on coinbase or binance. Sometimes there are event going for such deposits and gain you some points or privilege. Maybe this is the reason, or he just keep transferring all his fund on a certain place like accumulate in one bag for staking. I doubt this is arbitrage since the price diff isnt that high for a good profit.

[noorman0]

-snip-

I didn't really notice that there were any previous transactions, sorry for that. I'm just reading the charts when this thread was created where prices suddenly pumped so high that perhaps at that time there was a significant difference between exchanges making it possible to arbitrate large amounts.

And I find @dansus021 and @cryptoaddictchie's conjectures more reasonable. Actually this kind of strange transaction is not the first time. Even more so if it is done by the token company accounts themselves, a kind of "frying" the price in terms of trading on our local exchange.

[decodx]

<...> I doubt this is arbitrage since the price diff isnt that high for a good profit.

We can't know that since he can trade in different pairs on both platforms. Three-point (or triangular) arbitrage is a very popular trading method during a volatile market, especially when using bots.

[Fivestar4everMVP]

He keeps sending hundreds of thousands of coin back and forth to himself nonstop from Coinbase to Binance then back to Coinbase. I think he's just sending it not selling it so it wouldn't affect price would it? If not, then why keep doing it?

People send tokens back and fort for several reasons, it is possible this user is taking advantage of price differences between binance and coinbase which I believe it absolutely allowed and normal, there's is absolutely no way authorities will label and transaction made between exchanges as money laundering.
Money laundering I believe means moving a big amount of money that is above the limit laws permit out of one's country to another country through ways that is not legal, that is using crocked ways to move out the money because going through the normal process won't allow you move such amount at once because it's above the limit allowed by law.