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Crypto Exchanges Are Cleaning Up Wash Trading

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Crypto Exchanges Are Cleaning Up Wash Trading

The cryptocurrency market is changing for the better, according to research from the Blockchain Transparency Institute. In their latest Market Surveillance Report, BTI revealed that numerous exchanges are cooperating with its verified program to stamp outwash trading.

The program has helped successfully detect and shut down wash trading accounts on many exchanges, contributing to a drop in global wash trading of “35.7% among the real Top-40 exchanges.”

The “cleanest exchanges” listed by the program are Kraken, Poloniex, Coinbase, and UpBit. OKEx and Bibox have the highest levels of apparent wash trading amongst the top 40 included exchanges, with up to 75 percent fake volume.

One might assume that stronger regulatory frameworks have forced exchanges to move away from suspicious trading activities, but even highly-regulated exchanges may be tempted to inflate their volumes to attract more traders. On Bithumb, based in South Korea, wash trading accounts for up to 90% of trading volume for Dash and Monero, the report alleges.

While wash trading is deceptive to investors, it’s not always a sign of malice on the part of exchanges. Many marketplaces, like OKEx, make it a practice to attract high-frequency traders with lower fees or other incentives. By doing so, they may inadvertently incentivize traders to fudge their numbers.

On the other hand, some exchanges do see wash trading as an easy way to move up the rankings.  “For $1,000 a month, wash trading firms will inflate volumes by a few million dollars,” an exchange head told reported, although it’s not clear how well these companies have survived the bear market.

Plenty Of Work Left To Be Done…

There are still 73 exchanges in the top-100 on CoinMarketCap with wash trading volumes greater than 90 percent, according to the BTI. Wash trading bots are detected through “repetitious buying patterns” as well as through observations of “flat volume bars and/or irregular candle formations.”  These same exchanges exhibit frequent spoofing, or “ghost orders and trade executions” that create the illusion of trading activity.

According to the report, wash trading of Bitcoin, Ethereum, XRP, and Litecoin occurs on some of the top-40 exchanges. The most heavily wash-traded tokens are Ethereum Classic, Monero, and Dash.

But things have improved since the last BTI report, and the Institute has been busy adding newly-compliant exchanges to the Verified program. Binance, Gemini, Bitflyer, and Indodax have recently been added after improving their wash trading stats over the past year. All of these exchanges now exhibit less than 10% wash trading volume.

However, “there is still work to be done in the cryptocurrency market,” the report concludes. Fake trading volumes significantly distort the market picture, thereby misleading investors.”

Bitcoin News

Huobi Is Now The First Major Exchange to Run a Chainlink Node

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Huobi Is Now The First Major Exchange to Run a Chainlink Node
Huobi Is Now The First Major Exchange to Run a Chainlink Node

Major cryptocurrency exchange Huobi will integrate their price data with Chainlink’s ecosystem in an effort to improve its own data integrity and provide more accurate price information. While Binance was the first major exchange to provide their data to Chainlink oracles in October 2019, Huobi has gone one step further by running its own node on the system through Huobi Wallet. This allows the exchange to sign its own price data allowing users to confirm that any exchange data coming from the Huobi Node is authentic and direct from the source. Huobi Wallet CEO Will Huang stated:

“DeFi offers a unique value proposition of providing financial products that are transparent, open, and programmable. We are very excited to accelerate our involvement in this emerging trend by providing Chainlink users access to Huobi Global exchange data, as well as running our own Chainlink Node.”

The first batch of price pairs will include BTC/ETH, BTC/USDT, ETH/USDT, and LINK/ETH, with more to follow.

Huobi appears to be on a mission to improve its credibility following concerns around volume inflation last year. By running a node, the exchange’s reputation will be on the line should any of the data shared through Chainlink prove to be inaccurate. As one of Gibraltar’s largest crypto firms, the integration comes in the wake of the country’s continued efforts in reducing market manipulation by crypto firms over the last few months. Last year Huobi partnered with Global Digital Finance (GDF), co-chairing the Market Integrity Working Group with Solidus Labs.

In 2019 a Bitwise report implied that Huobi was reporting inflated trading volume, causing an internal investigation to weed out any potential wash trading strategies by market makers. Huobi Global CEO Livio Weng admitted wash trading may have occurred:

“We did identify a few of our market makers conducting what we suspect may have been wash trading for the sake of performance and marketing purposes. We have already communicated with these market makers and they have discontinued the strategies in question.”

Huobi has since moved to the top 10 exchanges in Messari’s ‘Real Volume’ list.

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Blockchain News

OKEx Now Offers A Latin American Fiat Gateway With Latamex

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OKEx Now Offers A Latin American Fiat Gateway With Latamex
OKEx Now Offers A Latin American Fiat Gateway With Latamex

OKEx, a major global cryptocurrency exchange, is embracing the Latin American crypto market by launching a fiat gateway for three local currencies. According to a July 3 announcement, OKEx users can now buy Bitcoin (BTC) and Ether (ETH) in exchange for the Argentine peso (ARS), the Brazilian real (BRL), and the Mexican peso (MXN) via a direct bank transfer.

OKEx’s partnership with a company called Settle Network allowed them to enable these features. Settle Network is claimed to be the largest digital settlement network in Latin America. The new service is provided through Latamex, Settle Network’s proprietary product. Latamex is designed to unlock crypto purchases using local currencies in Latin America. Jay Hao, CEO of OKEx, highlighted that the cooperation will allow OKEx to work with the LATAM market in a compliant way. The executive promised that OKEx will continue to add more cryptocurrencies “to allow more users to purchase cryptocurrencies more conveniently.” 

OKEx is not the first major exchange to implement Settle Network’s Latamex. Binance, the world’s largest cryptocurrency exchange, partnered with Settle Network to provide a similar feature in late 2019. As reported, Binance’s LATAM offering featured BTC, ETH as well as Binance’s native token BNB and proprietary stablecoin, BUSD. The gateway was initially available for ARS and BRL.

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Altcoin News

Cardano’s ADA Could Be Listed On Coinbase In 2020

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Cardano’s ADA Could Be Listed On Coinbase In 2020
Cardano’s ADA Could Be Listed On Coinbase In 2020

Cardano’s native cryptocurrency, ADA, may be listed on Coinbase by the end of 2020. This news comes following an announcement that ADA holders will soon be able to stake their assets in Coinbase custody.

A spokesperson from IOHK — Cardano’s development company — released the following statement replying to the question of whether a Coinbase listing is also in the works:

This news comes amid Cardano’s Virtual Summit, which revealed a plethora of news updates for the project this week. On July 2, it was announced that IOHK is launching cFund in partnership with Wave Financial Group. cFund will be a venture fund aimed at fostering adoption of IOHK’s blockchain platforms. The company has initially committed $10 million, with another $10 million to be raised by its partner. cFund is expected to make investments worth $250,000–$500,000 in “startup and early-stage businesses that build their products and services on IOHK’s blockchain technologies, including Cardano.”

In a recent tweet, Cardano founder harles Hoskinson pointed out that the Cardano Virtual Summit has already been attended by over 10,000 guests, making it bigger than popular Blockchain conference Consensus.

Charles Hoskinson

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