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Crypto Wash Trading

arxiv.org

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Re: Crypto Wash Trading

#261

Post by JumpCrisscross »

bduerst wrote: post #253
JumpCrisscross wrote: post #227

Earlier quoted context omitted.

> Anti-spoofing tech for regulated securities. There's no rules for crypto to suggest that Coinbase needs to (or would) flag a group of individuals doing this. It's the same stuff that catches money laundering. Coinbase isn't exempt from anti-money laundering laws. (With respect to Coinbase not being subject to the Exchange Act, that's very much an open, if irrelevant to this discussion, question.)

I don't see how that is relevant here. Wash trading is market, price, and reputation manipulation, not money laundering or tax evasion. I'm not sure Coinbase's need to report money laundering applies.

> Wash trading is market, price, and reputation manipulation, not money laundering or tax evasion

A lot of money laundering involves wash trading. That's why institutions like Coinbase have systems in place to detect it. Non-laundering wash trades would get flagged by such a system. If it were systemic, it would almost certainly merit a SAR.

Re: Crypto Wash Trading

#262

Post by lottin »

betwixthewires wrote: post #252
lottin wrote: post #244

Earlier quoted context omitted.

The reason financial transactions take time is not that there's something wrong with the technology, but that we, as society, have chosen to establish capital controls. Choosing to evade such controls, without really understanding why we put them there in the first place, basically makes you an anti-social brat.

> ...we, as society, have chosen to establish capital controls. Obviously that's not the case if entire societies use bitcoin now, as soon as it is an option. We didn't choose the mess, it was foisted upon us. You can make excuses for the current system if you want to, but you're wrong. You can shame people tired of paying a quarter of their pay to western union to help Tia afford a water tank so she can have running…

> We didn't choose the mess, it was foisted upon us.

What mess? Borders and customs? Yes, we chose that.

Re: Crypto Wash Trading

#263

Post by thebean11 »

lottin wrote: post #259
thebean11 wrote: post #177

Earlier quoted context omitted.

That's..a different discussion. My point is that IN bank and IN wallet are both technically incorrect, but for basically all purposes correct. But yes, you are right that the vast majority of users of [piece of software] have not verified [piece of software] and are relying on other humans to basically tell them if they should or shouldn't run it.

You have a point in that neither bank accounts nor bitcoin wallets are wallets in any shape or form, the difference is bank accounts are not advertised as wallets, but bitcoin wallets are. Also interesting that the bitcoin imagery is all about gold coins, when in fact there are no coins at all, virtual or otherwise. Bitcoin is merely an abstract unit of count. The very name 'bitcoin' is misleading. Everything about c…

You really think people equate crypto wallets with physical wallets, more than they do bank accounts? Not sure I agree. I think it would be much better if they did equate it with a wallet. An account can be recovered if lost, a wallet cannot. Wallet encourages better behavior security wise IMO.

I think you're grasping at straws with the coins thing..you really think there's an attempt to confuse people into thinking that it's..physical coins?

Re: Crypto Wash Trading

#264

Post by mgaunard »

MuffinFlavored wrote: post #208
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…

> Automated trading strategies (e.g., "grid trading") are really popular Why? After buying and selling side fees, is it easy to make a profit in an automated way with crypto?

First, most good trading, crypto or not, is systematic, which is automated.

Then, from what people have told me, crypto is a highly inefficient market so huge of potential for market-making strategies. Tons of arbitrage opportunities between the various venues, centralized and decentralized, mostly uninformed non-professionals so non-toxic flow, huge spreads, etc. It's like the traditional tradi'g world but 30 years in the past.

"Grid trading" is apparently just a weird term for placing orders proactively on multiple levels to obtain a better queue position, useful for increasing edge capture on exchanges with price-time matching. There are a lot more sophisticated techniques you could transfer from the world of traditional electronic trading. Of they're successful on much more competitive markets, no reason they wouldn't work on crypto.

Re: Crypto Wash Trading

#266

Post by brianwawok »

vineyardmike wrote: post #188
ishjoh wrote: post #145

Earlier quoted context omitted.

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.

IANAL I don’t think thing that’s how taxes works. If you sell yourself the security, it never left your hand so you didn’t realize a loss.

I think he is trying to describe tax loss harvesting

https://www.investopedia.com/terms/t/taxgainlossharvesting.a...

What robo advisors can do.. is sell say.. asset A that perfectly tracks an asset (say S&P 500)... and then buy asset B that perfectly tracks an asset (say S&P 500).

So you end up with the "same thing" at the end of the day, but got to harvest some losses.

That said, I think there are some iffy legal situations here, and you run the risk of breaking the law here.

https://www.investopedia.com/terms/r/robo-tax-loss-harvestin...

https://www.sofi.com/learn/content/automated-tax-loss-harves...

Re: Crypto Wash Trading

#267

Post by betwixthewires »

lottin wrote: post #262
betwixthewires wrote: post #252

Earlier quoted context omitted.

> ...we, as society, have chosen to establish capital controls. Obviously that's not the case if entire societies use bitcoin now, as soon as it is an option. We didn't choose the mess, it was foisted upon us. You can make excuses for the current system if you want to, but you're wrong. You can shame people tired of paying a quarter of their pay to western union to help Tia afford a water tank so she can have running…

> We didn't choose the mess, it was foisted upon us. What mess? Borders and customs? Yes, we chose that.

Are you being obtuse deliberately?

First, no, most people didn't choose borders and customs. The very people we are talking about, the people that send money home, and their advocates, often ignore borders deliberately. I don't recall choosing any of that stuff. I don't think there's a person alive today that did.

But that aside, we aren't talking about someone checking your luggage for fruit seeds on the way in. You know damn well what mess I'm referring to, because you've spent however long in this thread defending it like none of the problems people point out exist.

Re: Crypto Wash Trading

#268

Post by [deleted] »

SilasX wrote: post #231
sabujp wrote: post #202

There's also "legal" wash trading, e.g. the same institution/person putting in large BTC spot buy orders and then shorting the BTC future. This is how companies like crypto.com, celsius, blockfi, etc are now able to give investors 8%+ on their USDC because the investors need the cash for expensive futures contracts. The companies loan the cash out to hedge funds at high interest rates, take a cut, and give the rest t…

There’s a greater than 8% yield between the spot price and the future delivery price?

[deleted]

Re: Crypto Wash Trading

#269

Post by abakker »

ishjoh wrote: post #172
abakker wrote: post #149

Earlier quoted context omitted.

1. Digital ownership of a token. Digital assets can still be copied and distributed. Notions of ownership and title in digital are still inherently problematic. 2. This is probably not a feature society needs. 3. Possibly good? I'd say instead of "low trust" being the feature, "no natural owner of the database" describes the supply chain situation better. 4. maybe. USD, Gold, Etc have historically been good at this.

> Digital assets can still be copied and distributed. Notions of ownership and title in digital are still inherently problematic Some NFTs come with additional publishing rights for the underlying asset. For example Eminems sold an NFT that contained to the rights and a different rapper bought it to make a song with it: https://bitcoinist.com/the-rapper-who-bought-eminems-nft-for... I think we're going to see more st…

>3. Agree. There are a lot of databases that should exist, but the economic incentives of individual participants in a system means nobody wants to pay for it. Blockchains might present a way to make an end to end distributed database with no single owner, but where commercial interest still exists. (E.g. not open source)

Re: Crypto Wash Trading

#270

Post by lottin »

betwixthewires wrote: post #267
lottin wrote: post #262

Earlier quoted context omitted.

> We didn't choose the mess, it was foisted upon us. What mess? Borders and customs? Yes, we chose that.

Are you being obtuse deliberately? First, no, most people didn't choose borders and customs. The very people we are talking about, the people that send money home, and their advocates, often ignore borders deliberately. I don't recall choosing any of that stuff. I don't think there's a person alive today that did. But that aside, we aren't talking about someone checking your luggage for fruit seeds on the way in. You…

If none of the people alive today wants borders, how do you explain the existence of borders? What is your theory? And no, I don't know what 'mess' you are referring to. You seem to talk quite cryptically, to be honest.
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