Crypto Wash Trading

Post by dustingetz » Fri, Nov 19, 2021, 5:59 PM UTC

Closi wrote: post #132

gillesjacobs wrote: post #118

This 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.

Post by joshfraser » Fri, Nov 19, 2021, 6:01 PM UTC

teitoklien wrote: post #95

joshfraser wrote: post #87

Earlier quoted context omitted.

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.

Im specifically talking about up and coming , memecoins. The liquidity pool on these are usually provided by token owner themselves, fee doesnt matter there (gas fees does, but they make much much more by doing this). Tokens like these need these fake volumes to get the necessary amount of holders , publicity and volume to qualify to be listed on centralised exchanges. Even when everyone can see you do it, owners of…

Post by ishjoh » Fri, Nov 19, 2021, 6:01 PM UTC

brianwawok wrote: post #30

dragontamer wrote: post #14

Earlier quoted context omitted.

When you trade a any security to yourself (or someone closely related to you) to give the illusion of the price going up. (EDIT: Well... it could be for any reason. But illusion of price going up is one such application of the strategy). Lets say you invent a new NFT. You sell the NFT to __yourself__ for $100. Then, you sell the NFT to yourself (again) for $200. Finally, you sell the NFT to yourself for $1000. Then y…

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:/…

Post by jdaggers » Fri, Nov 19, 2021, 6:01 PM UTC

winternett wrote: post #74

rossdavidh wrote: post #2

Can somebody explain to a crypto-naif what "wash trading" means here?

People think that because something is professionally and popularly marketed, and frequently painted as a "hot new trend!" that is profitable that it is a train they need to hop on to. Crypto and NFT are (relatively) new online havens for many criminals, money launderers, and scammers to hide within in the same ways that AMWAY, Time Share Vacation Sales People, and as the guys selling speakers out of their vans in a…

Post by abakker » Fri, Nov 19, 2021, 6:02 PM UTC

ishjoh wrote: post #122

nefitty wrote: post #66

Earlier quoted context omitted.

The market is interdependent. Wash trading on one platform benefits all other platforms. When you ask someone the price of BTC they don't say $x on Coinbase, $y on Kraken, etc. Literally all of crypto is a scam. After 10 years there is not one feasible use case that isn't done better through another tool. I don't consider "making black markets and extortion easier" a feasible use case.

I would say there are four important use cases of Crypto so far. 1) NFTs - digital ownership 2) DAO - organizations without having to setup an LLC that allow voting etc 3) Accounting for low trust societies (supply chain management, etc) 4) Value store for very high inflation currencies, or states with severe problems