Crypto Exchanges, Wash Trading and Why It’s Time for a Spring Clean
Fake news, fake companies, and fake liquidity – navigating the cryptocurrency market is often as clear as mud, especially considering up to are likely to be false, according to research compiled by The Block.
The traditional finance sector is no stranger to wash trading and neither is the digital asset market, with several crypto exchanges supposedly getting their hands dirty in order to clean up trading volumes.
BKEX, a crypto exchange registered in the British Virgin Islands, was reportedly found to be to the exact number, manipulating trade volumes to create the illusion that it was an attractive platform to buy and sell digital assets.
Why? Because more trading activity translates to a higher position on crypto market cap rating sites, not to mention popular exchanges can charge fees through the roof for crypto projects to list.
For crypto traders, it can be similar to interacting with a used car salesman – you feel like you’re getting a good deal, full of trust only to find shortly after that there’s no gas in the tank.