How is it possible that there are unregulated exchanges still?
This seems like a regulation failure.
Crypto Wash Trading
131–140 of 306 posts
Re: Crypto Wash Trading
#132This paper jumps the gun. Detecting wash trading by examining distributions over rounded order prices is a strong and dubious claim for which they provide little evidence. The author's equate wash trading to non-rounded, clustered prices which really just indicates automated trading. Now automated ("bot") trading is a technology needed for exchanges wash trading sure, but not exclusive evidence of it. Automated tradi…
Benford's Law is a pretty established method of detecting fraud in forensic accounting.
Re: Crypto Wash Trading
#133Earlier quoted context omitted.
Why don't you read through the paper? Here is the short answer: > We adopt the definition of regulated exchanges from the state of New York, which has one of the earliest regulatory frameworks in the world. [6] > 6 Regulated exchanges are issued BitLicenses and are regulated by the New York State Department of Financial Services. Bitlicence carries some of the most stringent requirements. Our main results are robust…
Lest anyone think that the solution is more regulation, it's worth looking at the impact of the BitLicense. This overbearing regulatory framework has stifled innovation and forced crypto startups to leave the world’s leading financial hub and build their companies elsewhere. Compliance costs millions of dollars, leaving most startups with no viable option except to block their users from accessing their services in N…
What makes you think it was inadvertent?
Re: Crypto Wash Trading
#134Earlier quoted context omitted.
Oh yeah? Ever tried to send funds to a family member on the other side of the world over a weekend?
Western Union, cash money in minutes in nearly all over the world ?
They're not open at night. They take egregious fees, often up to 20% on the exchange rate. You can't send more than $2,500 online. And who wants to stand in line, fill out paperwork, or walk around with large sums of cash? If that exploitative company is the best example you've got, I rest my case.
Re: Crypto Wash Trading
#135Earlier quoted context omitted.
With cash, if you put a fortune in your shoebox it is "IN" your shoebox. The whole point of bitcoin is the distributed nature. Your wallet can be copied without altering any actual holdings or values, whereas a shoebox cannot. A bitcoin wallet is more like a safety deposit box key, than an actual box itself.
That's not the comparison I made. I'm talking about a bank account not holding physical bills.
> I'm talking about a bank account not holding physical bills
Trusting the regulated bank isn't that far from trusting the monetary authority that gives paper bills value. Or, for that matter, for the 99% of people who have not verified Bitcoin's math and have not inspected the code running on the servers they buy Bitcoin through, trusting the techies who pitch the product.
Re: Crypto Wash Trading
#136Oh look, another weekly crypto hating thread on HN
Re: Crypto Wash Trading
#137This paper jumps the gun. Detecting wash trading by examining distributions over rounded order prices is a strong and dubious claim for which they provide little evidence. The author's equate wash trading to non-rounded, clustered prices which really just indicates automated trading. Now automated ("bot") trading is a technology needed for exchanges wash trading sure, but not exclusive evidence of it. Automated tradi…
It's hard to tell wash trading from legitimate trading.
Because I'm involved with a committee on financial semantics I wound up learning a bit about swap trading. For stocks if you don't like your long or short position you can buy or sell and it is done.
In the case of swaps if you don't like your position you write another swap contract that is the opposite of the one you don't like. Both are on the books. In the 2008 crisis the size of outstanding swap liabilities dwarfed the real economy, but when you added them all up they mostly canceled out, both in the aggregate and for almost all of the market participants.
Looking at a situation like that which is hard to unravel people are going to make assumptions about the motives and ethics of the participants which are not substantiated.
Re: Crypto Wash Trading
#138I 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…
What's a "regulated" exchange in this context? US Exchanges are "self-regulated" and ultimately answer to FINRA and the SEC. Any rules they publish must be approved by the SEC. Theres no such process (AFAIK) with "panel A" firms. Its still the wild west. Does regulation mean KYC for client onboarding? Thats a completely different thing. We're not talking about on-exchange trading rules and compliance monitoring in th…
The CFTC does have some jurisdiction.
Coinbase: https://www.cftc.gov/PressRoom/PressReleases/8369-21
Kraken: https://www.cftc.gov/PressRoom/PressReleases/8433-21
Re: Crypto Wash Trading
#139How is it possible that there are unregulated exchanges still? This seems like a regulation failure.
Because there are other countries around the world? The largest exchange in cryptocurrency trading volume is Binance, which is headquartered in Cayman Islands. Not sure why this question is even asked, cryptocurrencies are largely created in response to regulations and restrictions.
Re: Crypto Wash Trading
#140Earlier quoted context omitted.
What if the reason of slow adoption is traditional institutions act against it?
I don't think that's the case. There was a period of time about 5 or so years ago where you could pay with Bitcoin almost anywhere. That's all but disappeared after a wave of $100 transaction fees hit. Use case was killed by itself.
> There was a period of time about 5 or so years ago where you could pay with Bitcoin almost anywhere.
I do not recall this time at all.