South Korean exchange platform Bithumb has made a comeback after the recent hack. But again the exchange seems to face troubles due to the accusations of faking its trade volume by inflating it.
CER, a cryptocurrency exchange rating firm published a new report that accuses Bithumb of faking up to 94 percent of its trade volume since the late summer of 2018.
CER explained their allegations showed several examples of trade activity of the company, that hints that something is fishy. For instance, in September BTC trade volume jumped suddenly as much as 10x on Bithumb with around $350 million in daily trade volume. Meanwhile, other exchanges were facing a significant drop with Bitcoin going all the way down.
Also, from October 15 to November 11, Bithumb’s daily trade volume spiked to $4.4 billion, which is over 12 times more. This indicates one more example of odd trading patterns according to CER.
CER points out the exchange platform’s trading activity considering it as “wash trading.” Wash trading means a type of market manipulation, in which an investor simultaneously sells and buys the same financial instruments causing fake and misleading activity.
Additionally, Gleb Myrko, CER marketing lead talked about Bithumb “Judging from our multifaceted investigation on Bithumb charts we see the signs of trade volumes manipulations, specifically, wash trading. Having calculated Price-Volume Correlation, we came to the conclusion that the trade volume performance is not linked to price fluctuation on the exchange.”
CER also noted, “strange activity spikes in the first few minutes of the 11 a.m. hour daily that delivered 95 percent of the daily total volume, and irregular trade volumes that didn’t align with price moves.”
Moreover, Bithumb has responded to the accusations in a Forbes interview saying, “Bithumb is doing nothing to inflate trade volume. Bithumb is not selling the mining-based coin. Bithumb is trying to get more customers by providing various promotions just like any other company in the world as a normal business.”
Notably, Bithumb is the second-largest cryptocurrency exchange having trade volume at $1.56 billion.