This article comes fromBloomberg, Originally by Olga Kharif
Odaily Translator |
This article comes fromBloomberg, Originally by Olga KharifOdaily Translator |”
When bitcoin hit a 17-month high in late June, the milestone was met with some skepticism.
(Bitcoin) large gains in the short term may indicate that someone is trying to artificially push the market,
Extreme volatility suggests that manipulation is rampant.ReportWhile many cryptocurrency transactions take place on a public digital ledger known as the blockchain, there are many others that take place on more than 200 crypto exchanges around the world. Large exchanges that trade traditional assets such as stocks tend to be heavily regulated, but most cryptocurrency exchanges are not, and investors have no way of knowing whether volumes and prices reported by exchanges reflect real activity or are simply the result of market manipulation.
“In order to attract more funds and usersHunter Horsley, CEO of Bitwise Asset Management, which operates a crypto index fund in San Francisco, said many cryptocurrency exchanges routinely fake trading volumes to attract more crypto assets and users. Specifically, one of the goals in doing so is to achieve a higher ranking on CoinMarketCap.com. CoinMarketCap.com is the leading website investors use to follow global crypto prices. Cryptocurrency marketers are known in the industry to hire dedicated teams to amplify their trading volume on an exchange by trading back and forth between two accounts. A share of Bitwise in May
Report
According to the report, 95% of Bitcoin exchange volume on CoinMarketCap.com is fake, or non-economic in nature.
In the crypto space, the risk lies with crypto exchanges.
Said Jeff Dorman, chief investment officer of Arca. (Note: Arca is an asset management company that invests in cryptocurrencies and other digital tokens)
Regulatory issues cannot be avoided
Regulators are scrambling to address the issue. Bloomberg (Bloomberg) reported on July 19 that the U.S. Commodity Futures Trading Commission (CFTC) is investigating BitMEX to determine whether the exchange violated regulations by allowing Americans to trade. BitMEX is headquartered in Seychelles and is not registered with the CFTC. BitMEX declined to comment. In April, New York Attorney General Letitia James filed documents in court alleging that entities linked to the Bitfinex exchange lost more than $850 million in mixed customer and company funds. Bitfinex responded that the document was ridden with false assertions and denied the attorney generals claims. At the same time, Canadian authorities are also investigating the disappearance of Quadriga (Note: operator of cryptocurrency exchange QuadrigaCX) user funds.The U.S. Securities and Exchange Commission (SEC) has yet to approve a crypto-related exchange-traded fund (ETF), in part because of concerns about the integrity of exchanges. The agency has rejected many bitcoin ETF applications in recent years. Among them was the application of the Winklevoss brothers, on the grounds that the applicants failed to demonstrate how they would prevent fraud and market manipulation. Accordingly, the Winklevoss brothers are forming a self-regulatory organization that they say will help regulate the crypto industry in the United States.
In June, the Financial Action Task Force (FATF) began requiring exchanges to collect information on senders and receivers of transfers in excess of $1,000 or €1,000. FATF is an intergovernmental organization responsible for setting anti-money laundering rules, followed by most countries. But some cryptocurrency exchanges based in lightly regulated regions such as the Caribbean may not abide by these rules due to jurisdictional issues.There are always people who better than you
Bitsian recently said that it found 100,000 instances of such deception on one exchange alone in one month.
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