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Four of five deals on fake cryptocurrency exchanges - Blockchain Transparency Institute

12/27/2018
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A sensational statement was made by researchers at the Blockchain Transparency Institute. They found that 80% of the trading volume of the 25 largest cryptoexchanges are internal operations. Which do not affect the market in any way, but wind up the turnover figures. Only two sites do not use gray schemes to increase their popularity.

How to cheat the investor and the market

To obtain an objective picture of the Blockchain Transparency Institute, two documents were analyzed - the Book of Applications and the trade tape. After that, the figures were compared with reports on the size of the turnover. Bitcoin was considered as the object of research as the most liquid asset.

As a result, violations were identified on 23 of the 25 largest cryptoexchanges in the world. The mechanism of deception is quite simple. Market makers with the help of robots carry out a huge number of operations by agreement. In fact, they move assets in a circle. Since the trading platform itself is also involved in the scheme, no commission is charged for such operations.

It is necessary to recognize that such operations do not bear direct damage to traders. They do not affect the current value of the asset. Their task is to “increase” the turnover in the reports. According to the Blockchain Transparency Institute, this is how up to 80% of all transactions are performed. Only Binance and Bitfinex do not engage in such a deception. By the way, according to polls of 11587 users in the network, Binance was recognized as the safest site.

Another myth about cryptocurrency

Against this background, the study looks interesting from Chainalysis. According to it, only 27 of the 460 million Bitcoin blockchain addresses have real funds in the accounts. Of the total number of 460 million, only 173 million belong to private individuals or companies.

However, 147 million, or 86%, are reserved or used by cryptocurrency sites. Of the $ 41 billion transfer of the network over the past three months, only $ 9 billion was indeed an economically justified transaction.

However, here it is worth considering that there is now a rapid growth in over-the-counter turnover of cryptocurrencies. Therefore, the reports of Chainalysis and Blockchain Transparency Institute make it possible to understand the real scale of trade.

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