Bitfinex, a major digital currency exchange, announced on Tuesday the deployment of a proprietary surveillance tool to combat market abuse on the crypto trading.
Dubbed Shimmer, the tool will help the exchange to identify and investigate possible manipulative behaviors and suspicious trading practices on the exchange. This, according to the exchange, will improve market integrity and visibility.
Commenting on the new tool, Paolo Ardoino, CTO at Bitfinex, said: “Comprehensive market and trade surveillance capabilities are integral to operating a leading cryptocurrency exchange. To meet the complex needs of an evolving digital asset class and to protect our sophisticated participants, Bitfinex has chosen to develop its own state-of-the-art surveillance system. This will help to assure that potentially manipulative practices are rooted out and suspicious behaviour detected.”
Assuring safety to high-volume investors
The market alert and reporting features are operating on Hive, the crypto exchange’s match processing engine, and will send alerts on any trading suspicion on any pair listed on the platform.
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The exchange also detailed that the tool will be more useful for its futures and margin trading services and is expecting an influx of institutional investors with it.
“This tool is especially relevant for our futures and margin funding products,” Ardoino added. “We chose to use the Rust programming language for its execution speed and programming safety. The Rust package manager and ecosystem allowed us to be up and running with a workable market detection tool in a short time frame.”
Though Bitfinex developed its proprietary surveillance tool, the exchange is already using Chainalysis’ know-your-customer (KYT) solution for alerts on suspicious transactions. Tether, Bitfinex’s sister platform, is also using KYT to prevent manipulation of its stablecoin.
This came when the exchange is facing allegations of market manipulation and also lost hundreds of millions to its payment processor Crypto Capital.