Bithumb denies reports of wash trading

20 Dec, 2018 | Updated: 20 Dec, 2018
by Will Heasman
Bithumb denies reports of wash trading

In a recent report on the state of wash trading within the cryptocurrency industry, the crypto exchange rating provider, Crypto Exchange Ranks (CER) accused South Korean exchange, Bithumb of faking their trading volumes. However, Bithunmb has hit back with a denial of these claims.

Forbes reports that Bithumb once ranked at the bottom of coinmarketcap's top 10 exchanges with 350 million daily trade volume, by November however they managed to more than 12 times that figure to 1.4 billion on coinmarketcap's “reported volume” charts.

For this reason, CER accused Bithumb of artificially trading in order to increase trade volume and therefore appear more attractive to potential customers, or wash trading.

CER marketing lead Gleb Myrko explained the accusation to Forbes:

"Judging from our multifaceted investigation on Bithumb charts we see the signs of trade volumes manipulations, specifically, wash trading. Having calculated Price-Volume Correlation we came to the conclusion that the trade volume performance is not linked to price fluctuation on the exchange."

During the course of the investigation, CER cited “strange activity spikes in the first few minutes of the 11 a.m. hour daily that delivered 95 percent of the daily total volume and irregular trade volumes that didn’t align with price moves.” 

Eventually coming to the conclusion that Bithumb “mastered a multi-factored approach to conceal its foul play. As far as we are able to judge the manipulations were fulfilled via matching opposite orders with the same price or by simply drawing transactions out of thin air, so-called ‘painting the tape.'”

Bithumb has so far denied all accusations of wash trading telling Forbes that:

"Bithumb is doing nothing to inflate trade volume. Bithumb is not selling mining- based coin. Bithumb is trying to get more customers by providing various promotions just like any other company in the world as a normal business.".

Read more: Most top exchanges are inflating their volume; wash trading


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