Ouch: major accusations aimed at cryptocurrency exchanges

New research suggests that wash trading may well be rife…

At a point where cryptocurrency confidence has taken something of a battering in recent weeks and months, a new report has been issued that’s not likely to make things an awful lot better.

The Blockchain Transparency Institute has undertaken some research, and as a consequence, it’s levelled a very big accusation against a bunch of cryptocurrency exchanges.

“We’ve taken a deeper dive into specific trading pairs on exchanges which are showing clear evidence of wash trading”, explains the intro to the report, which gives you an idea of what’s coming. As such, “we have calculated the true volume of the CMC [CoinMarketCap] top 25 BTC trading pairs”, and the report argues that many of the exchanges it looked are allegedly wash trading their volumes. That is, exaggerating them and apparently putting across a false impression of Bitcoin trading volumes.

Three exchanges come out of the report well – Binance, Bitfinex and Liquid – but several really don’t at all. Here’s the first part of the breakdown that the Blockchain Transparency Institute has put together. Pay attention in particular to that last column…

The staggering conclusion that the report reaches is that “based on this data over 80% of the CMC top 25 BTC pairs volume is wash traded”.

The full report can be found here.

The exchanges concerned haven’t responded to the allegations as of yet, and it’s important to note that they are allegations. Nothing has been proven. But, going back to the start of this piece, it hardly inspires an awful lot of added confidence in the market.

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