Blockchain Research Lab found witnesses of high levels of fake trading on several crypto exchanges. They urge CoinMarketCap and CoinGecko to step up the fight against this practice and display clearer trading data.
The study published on August 20, 2020 by the Blockchain Research Lab confirms previous reports of high washing trades on some crypto exchanges. Up to 98% of trading activity can be considered fake, the researchers believe.
Analysts analyzed data on several trading platforms. The exchanges were divided into three groups: without signs of overestimation of volumes, with mixed evidence of wash trading and direct evidence of such practice.
They used Bitfinex, Bitstamp, Bittrex, Kraken, and Poloniex as examples of non-wash trading exchanges. The second group includes Binance, HitBTC, KuCoin and YoBit. Analysts assigned FCoin, Huobi and OKEx to the wash trading group. The indicators of the first group were used for comparison with the data of the other sites.
BRL relied on metrics such as reported trading volume, exchange balances, wallet counts and web traffic on exchange sites. The study took into account the volumes of BTC, ETH, XRP, USDT and USD.
The average daily trading volume in the BTC/USD pair among the representatives of the first group amounted to $42 million. In the mixed group, it increased to $170 million, and among exchanges with clear signs of volume cheating it accounted to $490 million
The ratio of ETH trading volumes to exchange balances for exchanges from the last two categories is also significantly higher than for platforms without signs of wash trading.
Based on this data, analysts predicted the expected trading volume for the last two categories. In the mixed group, this figure was about 50% lower than the announced volumes.
BRL separately points out that among exchanges from the third category, 96-98% of ETH trading volumes are highly suspicious. Based on the data on the exchange balances of tokens, analysts also concluded that 72-97% of the volumes of the three exchanges also raise serious doubts.