BTI Report: A Majority of the Cryptocurrency Exchanges Fake the Trading Volumes Data

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BTI Report: A Majority of the Cryptocurrency Exchanges Fake the Trading Volumes Data

By Bhushan Akolkar
Posted on Dec. 16, 2018

Recently, the Blockchain Transparency Institute (BTI) has released its December 2018 report on exchange volumes data. The report goes to mention that a majority of the top twenty cryptocurrency exchange are reporting inaccurate trading volumes data. 


In fact, the BTI report shows only two exchanges - Binance and Bitfinex - have reported true data. While the rest are involved in a manipulation practice called ‘wash trading’ that provides artificial trade volume figures misleading the investors. 


Providing Wash Trading Evidence by Analysing Several Data Points




BTI report is based on its analysis done over the period of last three months. The institute claims to have spent “countless hours” checking out order books, speaking with market makers, analyzing volume data points, talking to high frequency traders as well as trade surveillance consultants. 


The BTI report notes: 

“For our December report we’ve taken a deeper dive into specific trading pairs on exchanges which are showing clear evidence of wash trading.  This has always been our goal, however we wanted to make sure this data was as accurate as possible, so we’ve been updating and perfecting these algorithms over the past 3 months. We have collected an enormous amount of data and we now feel confident to begin releasing these figures.” 


Furthermore, to make a direct comparison with the data from CoinMarketCap, the BTI market researchers presented trading volumes of top 25 BTC trading pairs. BTI found that for a majority to these pairs, the true volume is less than 1% of the reported volume of CoinMarketCap. However, only two exchanges - Binance and Bitfinex - in the top 25 reported their true volumes. 


The BTI report states:

“Based on this data over 80% of the CMC top 25 BTC pairs volume is wash traded. These exchanges continue to use these strategies as a business model to steal money from aspiring token projects.”


Faking Trading Volumes Data to Charge More Listing Fees


The BTI report also accuses the exchanges of faking their trading volumes data to charge more listing fees from new token projects. It notes that this year, an “average project spent over $50,000 this year in listing fees from exchanges.”


The Institute states: “We advise any token project to contact us regarding any exchange requesting large listing fees, especially those on our Advisory List.  Many of these exchanges exist solely to collect these fees while their bots run their exchanges.  We also have data on fair listing fee costs for exchanges which are not using wash trading bots.  We’ve had reports on fees ranging from 2BTC up to 75BTC.”    

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