Phony trading has been a complain in many circumstances in crypto trading. In recent study conducted by Alameda Research, a quantitative cryptocurrency trading firm cum research, revealed that 74% of the total crypto trading volume is fake. The study pointed out that many of the exchanges are artificially inflating their trading volume to rank on CoinMarketCap and to attract investors to their platforms.
Different from the approach adopted in the recent report by Bitwise, Alameda Research leveraged its trading data and analytical experience to draw a complete picture of the trading volume of each exchanges being monitored. The study uses six criteria in evaluating the authenticity of trading volume. This include: Manual investigation of exchange website trading history; Fraction of prints which cross the best bid and offer (BBO); Comparison of hourly volume to hourly volume of exchanges Widely accepted as legitimate; comparison of Alameda Research’s volume on an exchange to its typical volume; comparison of total exchange order book depth volume; and, fraction of exchange’s markets with reasonable order book depth volume.
Based on those criteria, the actual data collected from exchanges, from 18 May 2019 through 25 May 2019, were analyzed and subjected to statistical tests.
The study found that multiple self-claimed big exchanges failed the tests. It was also observed that these (failed) exchanges have used sophisticated but suspicious tactics to inflate trading volume such as copying the same transaction figures from other large and regulated exchanges, sneaking in large, fake transactions amid a flurry of smaller ones, etc., the study concluded. For more information about the study please see Almeda’s research Result on this link.
OKEx Joins BitMEX and Binance, others as Trustworthy
According to the report, OKEx, together with BitMEX, Binance, and a few others, tops the ranking to become the most trustworthy crypto trading exchanges in the space. projecting real trading volume.
Notably, OKEx came in the top place on its volume correlation above those of other regulated exchanges (mostly the U.S. exchanges), scoring at 98.9, followed by Huobi Global, CoinTiger, and BitMEX. This criterion indicates how closely tied the volume by time of the surveyed exchange is to the volume by time of the regulated exchanges.
A sudden increase of trading volume is suspicious when other regulated exchanges do not experience the same condition if no remarkable market volatility occurs.
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Likewise, beyond the shrewd wash trading tricks, Alameda Research found that Asian exchanges are playing a dominant role in the crypto trading globally. More specifically, it claims that crypto trading including both “spot” trades of actual digital assets and derivatives, like bitcoin futures—trades $38 billion in real volume a day, and 87% of that happens on Asian exchanges, with just 9% happening on the U.S. counterparts.
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As a less well-known exchange in the U.S. and European Union, OKEx has contributed significantly to the crypto trading volume in Asia. OKEx is stepping up its efforts in global expansion. Just recently, OKEx concluded a high-profile conference in Vietnam, called the OKEx Cooperation Summit 2019, where many high-quality projects and influential media outlets joined the event. In fact, Vietnam is the first leg of OKEx’s summit in 2019, expecting more similar events are in the pipeline.
In response to the wash trading issue, OKEx rest assured that the company is not in any way involved nor tolerate wash trading. In fact OKex has recently joined the Data Accountability & Transparency Alliance (DATA) led by CoinMarketCap, as a commitment in pursuing a fair and clean trading activities.
