Crypto Wash Trading

Post by mikegreenberg » Fri, Nov 19, 2021, 6:26 PM UTC

sokoloff wrote: post #140

coding123 wrote: post #102

Earlier quoted context omitted.

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.

Post by ur-whale » Fri, Nov 19, 2021, 6:28 PM UTC

MrMan wrote: post #179

ur-whale wrote: post #167

Earlier quoted context omitted.

> Benford's Law is a pretty established method of detecting fraud in forensic accounting Benford law never had to deal with exchanges where any customer can write a python bot and start trading at sub-second latencies via the exchange API's. I'd be very surprised if whatever statistical model they're relying on is in any way a match for what real (as in: legitimate orders from actual customers) trading goes on on cry…

Python ... Subsecond latencies Ok

Post by hirvi74 » Fri, Nov 19, 2021, 6:30 PM UTC

dragontamer wrote: post #14

rossdavidh wrote: post #2

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

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…

Post by vineyardmike » Fri, Nov 19, 2021, 6:32 PM UTC

ishjoh wrote: post #145

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:/…

This is exactly right, in fact if you think about tax breaks on losses it can actually make a lot of sense to sell yourself the same asset at a loss. In the case of crypto you probably wouldn't sell an NFT at a loss, but a coin would definitely make sense to sell to yourself at a loss.

Post by vineyardmike » Fri, Nov 19, 2021, 6:33 PM UTC

__alexs wrote: post #33

AutumnCurtain wrote: post #13

Earlier quoted context omitted.

A "wash trade" is a trade which generates no value because it represents a swap in kind. For example, if I sell a broad market ETF like VTI and buy a nearly identical asset at the same price from a different firm, that could be a "wash trade" for tax purposes (simplifying this, but this is basically the gist). In the context of crypto transactions, it's typically referring to trades which are just shifting the same a…

I was confused what "dss-flash" was so I looked it up. It's a DAO that enables you to mint infinite DAI (some crappy "stablecoin") for a transaction as long as you pay it back in the same transaction. One of the stated goals of this "feature" is > Exploits requiring a large amount of capital will be found quicker which makes the DeFi space safer overall. Ah yes, intentionally making your own product less secure and m…