Cryptocurrency exchange rating service CER has accused Korea-based Bithumb, the world’s second-largest crypto exchange by volume, of faking much of its trading volume since late summer 2018. In September, CER says, Bithumb ranked at the bottom of the top ten global exchanges as measured by CoinMarketCap, at around $350 million in daily trade volume. But by November 11, Bithumb peaked at $4.4 billion, more than 12 times as much. Today, Bithumb ranks second on CMC’s list of crypto exchanges as measured by reported volume at $1.4 billion. (Bithumb does not appear on CMC’s “adjusted volume” ranking.
Wash trading, or simultaneously selling and buying at the same time to create misleading and artificial activity.
“Judging from our multifaceted investigation on Bithumb charts we see the signs of trade volumes manipulations, specifically, wash trading,” CER marketing lead Gleb Myrko told me via Facebook Messenger. “Having calculated Price-Volume Correlation we came to conclusion that the trade volume performance is not linked to price fluctuation on the exchange.”
One example of odd trading patterns includes a 10X jump in BTC daily trade volume in September, which does not appear to be accompanied by fundamental causal factors.
Other examples include strange activity spikes in the first few minutes of the 11AM hour daily that delivered 95% of the daily total volume, and irregular trade volumes that didn’t align with price moves, CER says.