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Crypto Wash Trading

arxiv.org

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Re: Crypto Wash Trading

#81

Post by latchkey »

Zamicol wrote: post #24

This is why Uniswap's data is much more valuable than centralized exchanges. On-chain trading permits a degree of transparency and trustworthiness not readily feasible with centralized exchanges. Centralized exchanges are incentivized to doctor their data and lie about their volumes. The larger the volumes an exchange publishes, even if fake or gamed, the more relevant an exchange appears. Users must blindly trust wh…

Take a deep dive into MEV (miner extractable value). Poorly named for what it is, but I think it is something that you're missing in this picture.

Re: Crypto Wash Trading

#83

Post by thebean11 »

SavantIdiot wrote: post #47
cblconfederate wrote: post #18

This is great knowledge. People should not be investing based on what's popular or what is being traded. Better hold than gamble. Monetary speculation should be dumb in a sound money system

> Monetary speculation should be dumb in a sound money system Yeah, but no one is listening. From the richest to the poorest, it's all about "to the moon." 50% of my family and friends have RobinHood accounts and are day trading crypto (usually doge or shiba) ... and don't even know what it is. (A dear friend even spent $15k on a rig and thought i was lying when i said his crypto wasn't actually "IN" his digital wall…

What do you mean by "IN"? Are dollars "IN" your bank account?

I'm not trying to make a tired argument about dollars being fake or something, I just don't see the distinction as far as wallets specifically are concerned.

Re: Crypto Wash Trading

#84

Post by thebean11 »

dragontamer wrote: post #63
brianwawok wrote: post #30

Earlier quoted context omitted.

You do NOT need to change the prices for it to be a wash trade. What you gave me a profitable and likely illegal example of a wash trade, but not a definition of wash trade. A wash trade could be selling thing X for $100 and buying thing Y for $100 where X and Y are the same exact underlying thing. Just moving pointless trades back and forth inflates volumes, which makes people thing the market is moving. See https:/…

> You do NOT need to change the prices for it to be a wash trade. No you don't. But you do need to be buying and selling the underlying repeatedly for "some reason". That "some reason" could be fraud, or it could just be tax-optimization. The important thing is, "wash trading" is the technique of buying-and-selling the same thing at nearly the same time... which has many many applications. Many of those applications…

My guess is honestly just exchanges trying to get closer to the top of sites like coinmarketcap..

Re: Crypto Wash Trading

#85

Post by chizhik-pyzhik »

Zamicol wrote: post #24

This is why Uniswap's data is much more valuable than centralized exchanges. On-chain trading permits a degree of transparency and trustworthiness not readily feasible with centralized exchanges. Centralized exchanges are incentivized to doctor their data and lie about their volumes. The larger the volumes an exchange publishes, even if fake or gamed, the more relevant an exchange appears. Users must blindly trust wh…

Uniswap data is more reliable because of gas fees, which are upwards of $50 per trade recently.

Re: Crypto Wash Trading

#86

Post by PragmaticPulp »

loeg wrote: post #37
capableweb wrote: post #19

I recently had to go through extensive KYC/AML email conversations and phone calls with bunch of exchanges like Coinbase and others. Got me interested how wash trading could happen, when they were so strict with me, and which exchanges were investigated. These seems to be the exchanges they investigated. Would be interesting to see a breakdown of percentage per exchange, as I still don't understand how wash trading c…

> We quantify the wash trading on each unregulated exchange , which averaged over 70% of the reported volume. Coinbase isn’t one of the unregulated exchanges.

The trick to wash trading on CoinBase is (or was) to be on the inside:

> The order also finds that over a six-week period—August through September 2016—a former Coinbase employee used a manipulative or deceptive device by intentionally placing buy and sell orders in the Litecoin/Bitcoin trading pair on GDAX that matched each other as wash trades. This created the misleading appearance of liquidity and trading interest in Litecoin.

https://www.cftc.gov/PressRoom/PressReleases/8369-21

I wouldn’t be surprised if the wash trading on these unregulated exchanges followed a similar pattern where insiders were largely using the system to their advantage and using their insider knowledge or connections to (try to) hide it.

Re: Crypto Wash Trading

#87

Post by joshfraser »

teitoklien wrote: post #76
Zamicol wrote: post #24

This is why Uniswap's data is much more valuable than centralized exchanges. On-chain trading permits a degree of transparency and trustworthiness not readily feasible with centralized exchanges. Centralized exchanges are incentivized to doctor their data and lie about their volumes. The larger the volumes an exchange publishes, even if fake or gamed, the more relevant an exchange appears. Users must blindly trust wh…

.... People pay for volume on uniswap daily ... They just spin up new wallets and keep making them exchange very high amounts of a token (10ETH buy , 10 ETH sell , multiple times) (net expense is just the gas fees, but they get paid wayyy more to do this). This is usually done to get uniswap traded tokens onto various trending lists like cmc , dextools , etc. I’d say there is 10-40x the fraud on uniswap than on centr…

That doesn't pass the smell test.

Sure, you can wash trade on Uniswap, but it's expensive and everyone can see you doing it. The fee on most pools on Uniswap is 0.30%.

In contrast, wash trading on most centralized exchanges is cheap or free and very hard to prove unless you have access to their internal data.

Re: Crypto Wash Trading

#88

Post by [deleted] »

cdiddy2 wrote: post #28
capableweb wrote: post #19

I recently had to go through extensive KYC/AML email conversations and phone calls with bunch of exchanges like Coinbase and others. Got me interested how wash trading could happen, when they were so strict with me, and which exchanges were investigated. These seems to be the exchanges they investigated. Would be interesting to see a breakdown of percentage per exchange, as I still don't understand how wash trading c…

Ya I seriously doubt there is much wash trading at the Tier A exchanges you listed above.

[deleted]

Re: Crypto Wash Trading

#89

Post by bugzz »

PragmaticPulp wrote: post #86
loeg wrote: post #37

Earlier quoted context omitted.

> We quantify the wash trading on each unregulated exchange , which averaged over 70% of the reported volume. Coinbase isn’t one of the unregulated exchanges.

The trick to wash trading on CoinBase is (or was) to be on the inside: > The order also finds that over a six-week period—August through September 2016—a former Coinbase employee used a manipulative or deceptive device by intentionally placing buy and sell orders in the Litecoin/Bitcoin trading pair on GDAX that matched each other as wash trades. This created the misleading appearance of liquidity and trading interes…

Yeah that's a pretty well known case, specific to Litecoin. Also crypto has come a long way since 2016

Re: Crypto Wash Trading

#90

Post by mgh2 »

loeg wrote: post #37
capableweb wrote: post #19

I recently had to go through extensive KYC/AML email conversations and phone calls with bunch of exchanges like Coinbase and others. Got me interested how wash trading could happen, when they were so strict with me, and which exchanges were investigated. These seems to be the exchanges they investigated. Would be interesting to see a breakdown of percentage per exchange, as I still don't understand how wash trading c…

> We quantify the wash trading on each unregulated exchange , which averaged over 70% of the reported volume. Coinbase isn’t one of the unregulated exchanges.

Coinbase CFTC $6.5 million settlement: https://www.cftc.gov/PressRoom/PressReleases/8369-21
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