Top Crypto Exchange Bithumb Faking Up to 94% of trading volume; Bithumb denies the accusations

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Evaluation service of the cryptocurrency exchange CER he accused Korea Bithumb, the second largest encrypted exchange in the world by volume, a fake large part of the volume of trade since the end of summer 2018.

The analysis of the trade volume of BTC on Bithumb shows a significant increase on 25 August and falls on 12 November.CER

In September, according to the ERC, Bithumb was ranked at the end of the first ten & nbsp; global exchanges measured by CoinMarketCap, about $ 350 million in daily trading volume. But November 11 Bithumb peaked at $ 4.4 billion, over 12 times more. Today, Bithumb is in second place on CMC's cryptocurrency list, measured from the reported volume to $ 1.4 billion. (Bithumb & nbsp; does not appear on CMC "regulated volume" ranking.

The reason, according to CER?

Wash the trading or simultaneously sell and buy at the same time to create misleading and artificial activities.

"Judging by our multifaceted survey of Bithumb charts, we see the signs of commercial volume manipulations, in particular, the washing of trading," CER's marketing manager Gleb Myrko told me via Facebook Messenger. "Having calculated the correlation of the price volume, we have come to the conclusion that the performance of the volume of trade is not related to the fluctuations of prices in the exchange."

An example of odd trading models includes a 10-fold jump in the volume of BTC's daily trading in September, which does not appear to be accompanied by fundamental causal factors.

Other examples include strange peaks of activity in the first minutes of the 11AM daily hours that produced 95% of the total daily volume and irregular trade volumes not aligned with price changes, says CER.

The peaks of commercial activity during the first minutes of an hour have produced 90-95% of the total daily volume, says CER.CER

In addition, the average size of transactions increased from 0.21 BTC at the start of the summer to 5.88 BTC very significant, or 37,600 USD, from October 15th to November 11th.

The size of the transactions grew significantly compared to the beginning of the year.CER

Even the crafts followed a strange pattern. For example, & nbsp; the September 9 BTC transactions totaled an incredible 7,500 in just five minutes. This is 39% of the total daily trading and 94% of the whole day's volume.

According to the ERC, other currencies showed similar models, including LTC, ETC, XMR, ZEC, OMG and BTG.

A currency, the WTC, has shown the most intense artificial activity, says CER.

"The WTC stands out from all the coins we have observed, having only been traded on the exchange in the last day of August and had the shortest period between the pumps, which began on 28 October and lasted until 11 November , "CER states in a document shared with me. "For this reason, his pump was one of the most intensive: Waltonchain's inflated daily volume rose 350 times from 348k WTC (on average before the pump) to 122.5 million WTC (on average during the pump) only to then decrease by 1,450 times in one day from 206.7 million WTC to 141.8k WTC on November 12th. "

I asked Bithumb about the allegations and the company rejected them definitively.

"Bithumb is not doing anything to swell the volume of trade," a representative of the nameless company told me via e-mail. "Bithumb does not sell coins based on mining. & Nbsp; Bithumb is trying to get more customers by offering various promotions like any other company in the world as a normal business."

CER is a service of Hacken Ecosystemand Hacken offers "white hat" community token Concerned that these allegations could be motivated by commercial concerns, I asked Hacken if the company had ever tried to list on Bithumb.

The answer?

"Never."

The cryptocurrency experts I spoke with did not find this type of behavior difficult to believe, although they pointed out that to evaluate this specific charge they would need to review the evidence carefully.

That said, there seems to be little trust in the cryptic world … perhaps appropriate for the currency that should work in an environment without trust. Or maybe not.

"Everyone swells the numbers," says Aryeh Altshul, CRO at Hexa Labs, a blockchain advice. "It's normal practice in crypts."

All non-US exchanges are inflating transactions, agree with Brandon Wirtz, CEO of the AI ​​company Recognant, & nbsp; adding that & nbsp; many in the United States are doing the same … and using buffers between legitimate buying and selling offers to buy and resell coins between kosher transactions.

"It causes volatility and speed that can go well for 50 percent, more traffic," he said.

Crystal Clare Stranger, founder and CEO of PeaCounts, a blockchain-based salary payment company, says this is entirely possible and even common.

"In the encrypted space it is common to follow the adage of" pretending as long as you do "and many people grossly exaggerate how successful they have.Many companies have used market manipulators to pump the value of their tokens to succeed, and other exchanges they did this to get into the top ten. "

"It's very easy for a centralized exchange to exchange off-chain fictitious accounts using bots for the pop volume," Foreigner added. "And since the exchange itself involves a limited cost for these transactions, essentially only the processing cost, [it becomes]& nbsp; very tempting, especially with many opening exchanges in the last two years. It is a very competitive market. "

Another expert suggested that this could be related to Bithumb well-publicized hack in 2017 and 2018.

"Initially it was thought that the June 19 violation had led to the stolen encryption of being sent to unknown hacker portfolios," says Morgan Steckler, CEO of iTrustCapital, a digital currency pension planning company. "However, if recent data from fraudulent transactions prove to be true, and if Bithumb has been able to circumvent detection through more recent verification of their security and transaction protocols, it is also entirely possible that the 39 addresses thought to belong to hackers actually belonged to the exchange itself. "

Several experts did not want to be named.

"Basically, you take all the illegal stock trading activities that have been banned over the years and transfer them to the crypt, why? Because it's the Wild Wild West," said one, who runs the companies on both sides of fiat finance and cryptocurrency.

"Ghost orders are huge … it's where you open a purchase and sell at the same time on multiple accounts, then close one side of all transactions (example of purchase) and then run with your short position (sale side)."

Another expert suggests that Bithumb may have inadvertently contributed to the continued fall in Bitcoin prices.

"According to data reported by CCN, there is certainly evidence that suggests a strong correlation between the timing of Bithumb's promotion expiry and the sudden, and for many, shocking collapse that continues to play across the industry," he says. Travis Barker, CTO of Dash & nbsp; Marketing& nbsp; and early adopters and proponents of cryptocurrencies. "So far, I have not seen evidence to suggest malicious intentions – in other words, I do not know if Bithumb intentionally or incorrectly inflicted volume numbers or simply published very successful promotions to that effect."

CER representatives seem fairly certain that there have been intentional mistreatment.

"Bithumb dominated a multi factoring approach to hide his dirty game," says Myrko's CER. "As far as we are able to judge, manipulations have been met by matching opposing orders with the same price or simply drawing transactions from nothing, the so-called" painting the tape. "

The goal, suggests CER, may have been to establish Bithumb as one of the major global cryptography exchanges. The result, however, could be extremely negative.

it "undermine[s] the whole image of the blockchain sphere as an environment of trust and transparency, "says Myrko." Such irresponsible activity makes the encryption field less inhospitable to investors and industries that have seen blockchain as a new opportunity. "

That said, it is important to reiterate that Bithumb denies the allegations.

CER is planning to publish all of its data – over 20 pages of charts, images and documentation of what it considers to be fraudulent behavior.

At that point Bithumb will be able to respond directly to the accusations and perhaps offer an explanation.

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The CER cryptocurrency trade assessment service has accused Bithumb, the second largest cryptography in the world by volume, of falsifying most of the volume of trade since the end of the summer of 2018.

The analysis of the trade volume of BTC on Bithumb shows a significant increase on 25 August and falls on 12 November.CER

In September, according to the ERC, Bithumb ranks first among the top ten global stock exchanges measured by CoinMarketCap, at around $ 350 million in daily trading volume. But by November 11, Bithumb reached a peak of $ 4.4 billion, over 12 times more. Today, Bithumb is in second place on CMC's cryptocurrency list, measured from the reported volume to $ 1.4 billion. (Bithumb does not appear in the "adapted volume" ranking of CMC.

The reason, according to CER?

Wash the trading or simultaneously sell and buy at the same time to create misleading and artificial activities.

"Judging by our multifaceted survey of the Bithumb charts, we see the signs of the manipulation of commercial volumes, in particular, the washing of the trade," said Gleb Myrko, ERC's marketing manager via Facebook Messenger. "Having calculated the correlation of the volume of the prices, we have come to the conclusion that the performance of the volume of the exchanges is not tied to the fluctuations of the prices in the exchange".

An example of odd trading models includes a 10-fold jump in the volume of BTC's daily trading in September, which does not appear to be accompanied by fundamental causal factors.

Other examples include strange peaks of activity in the first minutes of the 11AM daily hours that produced 95% of the total daily volume and irregular trade volumes not aligned with price changes, says CER.

The peaks of commercial activity during the first minutes of an hour have produced 90-95% of the total daily volume, says CER.CER

In addition, the average size of transactions increased from 0.21 BTC at the start of the summer to 5.88 BTC very significant, or 37,600 USD, from October 15th to November 11th.

The size of the transactions grew significantly compared to the beginning of the year.CER

Even the crafts followed a strange pattern. For example, the September 9 BTC transactions totaled an incredible 7,500 in just five minutes. This is 39% of the total daily trading and 94% of the whole day's volume.

According to the ERC, other currencies showed similar models, including LTC, ETC, XMR, ZEC, OMG and BTG.

A currency, the WTC, has shown the most intense artificial activity, says CER.

"The WTC stands out from all the coins we have observed, having only been traded on the exchange in the last day of August and had the shortest pumping period started on 28 October and lasted until 11 November", CER states in a document shared with me. "For this reason, his pump was one of the most intense: the inflated daily volume of Waltonchain rose 350 times from 348k WTC (on average before the pump) to 122.5 million WTC (on average during the pump) only and then drop by 1,450 times in one day from 206.7 million WTC to 141.8k WTC on November 12th. "

I asked Bithumb about the allegations and the company rejected them definitively.

"Bithumb is not doing anything to swell the volume of trade," an unnamed company representative told me via e-mail. "Bithumb does not sell coins based on mines, but Bithumb is trying to get more customers by offering various promotions like any other company in the world as a normal business."

CER is a service from Hacken Ecosystem and Hacken offers a "white hat" community token. Concerned that these charges could be motivated by commercial concerns, I asked Hacken if the company had ever tried to list on Bithumb.

The answer?

"Never."

The cryptocurrency experts I spoke with did not find this type of behavior difficult to believe, although they pointed out that to evaluate this specific charge they would need to review the evidence carefully.

That said, there seems to be little trust in the cryptic world … perhaps appropriate for the currency that should work in an environment without trust. Or maybe not.

"Everyone swells the numbers," says Aryeh Altshul, CRO of Hexa Labs, a blockchain consulting firm. "It's normal practice in crypts."

All non-US exchanges are inflating transactions, agrees Brandon Wirtz, CEO of the company AI Recognant, adding that many in the United States are doing the same … and use the buffers between the legitimate buying and selling offers to buy and resell coins among the kosher trades.

"It causes volatility and speed that can be good for 50 percent, more traffic," he said.

Crystal Clare Stranger, founder and CEO of PeaCounts, a blockchain-based payroll company, says this is entirely possible and even common.

"In the encrypted space it is normal to follow the adage of" pretend until you do "and many people grossly exaggerate their success.Many companies have used market manipulators to exploit the value of their tokens to be successful and other exchanges have done this to enter the top ten ".

"It's very easy for a centralized exchange of fictitious off-chain accounts using bots for pop volume," added Stranger. "And since the exchange itself is cheap for these transactions, essentially only the cost of calculation, [it becomes] very tempting, especially with many opening exchanges in the last two years. It is a very competitive market. "

Another expert suggested that this could be related to the well-publicized Bithumb hacks in 2017 and 2018.

"Initially it was thought that the June 19 violation had led to the stolen encryption of being sent to unknown hacker portfolios," says Morgan Steckler, CEO of iTrustCapital, a digital currency pension planning firm. "However, if the recent data on fraudulent transactions prove to be true, and if Bithumb was able to circumvent the identification through more recent audits of their security and transaction protocols, it is also quite possible that the 39 addresses thought to belong to hackers actually belonged to the exchange itself. "

Several experts did not want to be named.

"Basically, you take all the illegal stock trading activities that have been banned over the years and turn them into a crypto Why? Because it's Wild Wild West," said one, who runs the companies both from the fiat and the financial cryptocurrency.

"Phantom orders are huge … it's where you open a purchase and sell at the same time on multiple accounts, then close one side of all transactions (example of purchase) and then run with your short position (sale side)."

Another expert suggests that Bithumb may have inadvertently contributed to the continued fall in Bitcoin prices.

"According to data reported by CCN, there is certainly evidence that suggests a strong correlation between the timing of Bithumb's promotion expiry and the sudden, and for many, shocking collapse that continues to play across the industry," he says. Travis Barker, CTO of Dash Marketing and early adopter and cryptocurrency proponent. "So far, I have not seen evidence to suggest mischievous intentions – in other words, I do not know if Bithumb intentionally or incorrectly inflated volume numbers, or simply by running very successful promotions in that direction."

CER representatives seem fairly certain that there have been intentional mistreatment.

"Bithumb dominated a multi-factorial approach to hiding his dirty game," says CER's Myrko. "As far as we are able to judge the manipulations were met through the matching of opposite orders with the same price or simply drawing transactions from nothing, the so-called" paint the tape ".

The goal, suggests CER, may have been to establish Bithumb as one of the major global cryptography exchanges. The result, however, could be extremely negative.

"Dig"[s] the whole image of the blockchain sphere as an environment of trust and transparency, "says Myrko." Such an irresponsible activity makes the cryptic field less attractive to investors and industries that have seen blockchain as a new opportunity. "

That said, it is important to reiterate that Bithumb denies the allegations.

CER is planning to publish all of its data – over 20 pages of charts, images and documentation of what it considers to be fraudulent behavior.

At that point Bithumb will be able to respond directly to the accusations and perhaps offer an explanation.

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