BTI report claims $6 billion of the daily crypto volume is fake

28 Aug, 2018
by David Borman
BTI report claims $6 billion of the daily crypto volume is fake

The Blockchain Transparency Institute released a report detailing research they have done across the top 130 exchanges and their reported volume/unique user ratios. Their conclusion is that approximately $6 billion of the daily volume reported across exchanges is in fact from wash trading, or in other words completely made up.

Wash trading is the practice of an individual or individuals repeatedly trading assets back and forth to simulate organic volume. It is done to make an exchange look more popular than it really is, and in traditional markets it is completely illegal.

The team used a method of comparing available data from the website SimilarWeb and data released by the exchanges. It surveyed the top 130 exchanges by reported volume, and found some staggering results: Roughly 67% of the volume being reported appeared to be made up of wash trades.

Their complete methodology can be read in the report, where they also offer a link to a spreadsheet which shows the data they used. They seem to have been very exhaustive in their work, and openly admit they will keep refining information as it becomes available. They also encourage any exchange to contact them with their most accurate data if they have any problems with the findings.

The findings are, to say the least, a little upsetting. While the biggest and most popular exchanges appear to be on the up and up, smaller exchanges seem to be the biggest problem. From the report:

"The largest offenders in the top 10 include ZB exchange which appears to be wash trading their volume to over 390x as well as Lbank to over a whopping 4400x. Other suspect exchanges in the top 10 include Huobi and Okex (Ribes data estimated them to be faking 80-90% of their total volume bringing their actual totals close to $100,000,000/24h) which also falls in line with this formula as they appear to be over reporting their volume by 12-19x coming in at $93M and $87M respectively."

The report details many other findings from many other exchanges, but concludes the following:

"Tallying up the volume numbers of the top 130 exchanges, it is estimated that over $6 billion dollars in daily trade volume is being faked with over 67% of daily volume being wash traded. Over 70% of the CMC top 100 is likely engaging in wash trading by at least 3x their stated volume."

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