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BTI Report: Majority of crypto exchanges fake 90% of trading volumes; Kraken, Poloniex, Coinbase, Upbit among the 'cleanest'

Image Credit: News BTC

Mon, 23 Sep 2019, 07:15 am UTC

Majority of the cryptocurrency exchanges are still faking nearly all of their trading volumes, according to a recent market surveillance report by the Blockchain Transparency Institute.

The report noted that overall wash trading, which is the manipulation of the market to artificially inflate a crypto-assets' activity, has declined. However, the practice is still rampant on several top crypto exchanges.

As per the study, global wash trading significantly dropped by 35.7% among the top 40 exchanges since the start of 2019. But, of the top 100 exchanges according to CoinMarketCap, as many as 73 are wash trading more than 90% of their volumes.

Further, among the top crypto assets, privacy coins were the most wash traded, with Monero and Dash getting over 90% each. They are followed by Bitcoin Cash, Litecoin, EOS, BSV, and Huobi Token with more than 80% each.

OKEx and Bibox were dubbed as the worst two exchanges for wash trading, with fake volumes allegedly surpassing 75%.

On the brighter side, the report revealed that Kraken, Poloniex, Coinbase, and Upbit were “cleaner” than before after the firms reduced their wash trading activities.

BTI has made a list of verified exchanges that claim to reduce their wash trading practices. Binance, Gemini, Bitflyer, and Indodax were the latest additions. For instance, Bitflyer has fallen under 5%, whereas both Binance and Gemini have dropped below 10%.

The U.S. and Japan territories are noted as the homes of the cleanest exchanges because of its strict regulations. Meanwhile, although South Korea also impose strict policies, the report found a higher instance of wash trading for privacy tokens as mentioned earlier.

This can be due to several factors, the main of which is the legal and regulatory standards in these countries. However, stricter regulatory frameworks do not always produce the cleanest exchanges,” the report noted.

Just recently, two cryptocurrency exchanges, OKEx’s Korea branch and Upbit, have delisted and stopped their support for privacy coins as they reportedly fall foul to the travel rule set out by the Financial Action Task Force (FATF).

In June, crypto data and indices provider CryptoCompare introduced the first cryptocurrency exchange benchmark that ranks more than 100 active spot exchanges worldwide. The new solution comes amid growing concerns of wash trading and incentivized trading schemes that are being used by exchanges. It will offer investors and traders a comprehensive, granular, and reliable source of information on the best trading venues.

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