Global wash trading in cryptocurrency markets has been reduced by 35.7 percent on the top 40 largest exchanges by real volume, according to the latest Blockchain Transparency Institute Market Surveillance report.
BTI also found that Kraken, Poloniex, Upbit, and Coinbase have consistently been the “cleanest” exchanges since the launch of the BTI Verified program six months ago. The BTI Verified program helps to ensure that trading volume on cryptocurrency exchanges is genuine.
Latest BTI report! We’ve been able to reduce global top 40 exchange wash trading by 35% since we launched the BTI Verified program in April. New BTI Verified exchanges include @binance, @Gemini, @bitFlyer, and @indodax. See the full September report: https://t.co/UGqm6CXHl9
— Blockchain Transparency Institute (@BTI___) September 19, 2019
The report also noted that Japan and the United States, two countries with relatively higher amounts of regulatory oversight, had the highest number of “clean” exchanges. However, the report noted that “stricter regulatory frameworks do not always produce the cleanest exchanges,” and pointed to South Korea as an example.
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Leading the charge on the other side of the spectrum, with the highest amount of wash trading, were OKEx and Bibox. However, the report noted that although “fake volumes of these exchanges exceed 75%, nevertheless, their real volumes (with wash trades removed) still place them in the Top-20 consistently.”
Other large exchanges that have struggled with wash trading in the past seem to be improving (particularly after becoming part of the Verified program, according to the report): “Binance is now under 10% wash trading after hovering close to 20% through the first few months of 2019. In addition, Bitflyer has been added as our data shows them under 5% over the past few months. We found Gemini around 12-15% at the beginning of the year, but they are now under 10% as well.”
”Among the Top-100 exchanges on CMC, there are 73 currently which are wash trading over 90% of their volumes.”
BTI also pointed out that in spite of widespread awareness around wash trading and promises to do better, popular volume and price data site CoinMarketCap is still listing “numerous scam exchanges in its Top 10 ‘Adjusted Volume’ rankings.”
“Its Top-10 list includes LBank, BW.com, Bit-Z, Coinbene, and OEX, which our data shows wash trading rates at high levels from 96.9% up to 99.7%,” the report explained, adding that “this continues to be because CMC ranks exchanges by trading volume without any basic checks, which motivates trading platforms to report false data and rank higher, thus becoming more visible to users.”
Indeed, BTI’s report said that only about a quarter of the exchanges on CMC publish truthful trade volume data: “according to our calculations, among the Top-100 exchanges on CMC, there are 73 currently which are wash trading over 90% of their volumes.”
Finance Magnates reached out to CoinMarketCap for comment but did not hear back before press time.
The extent to which wash trading plagues cryptocurrency markets was originally brought to light earlier this year when Bitwise Asset Management presented findings to the SEC that the vast majority of Bitcoin trading volume is fake.