Topic: Bitstamp the new OKCOIN 2.0 volume manipulators. Fake Wall observer. - page 2. (Read 2685 times)
October 11, 2015, 02:29:56 AM
Nearly all Bitcoin exchanges have been guilty of faking volume. Especially in these lower volume days they are doing their work to keep the volumes at least above a certain amount. Can you name 1 exchange that doesn't do this?
October 11, 2015, 12:00:06 AM
Bobby Lee on exchange volume deception in China:
https://www.reddit.com/r/Bitcoin/comments/21s8ea/bobby_lee_on_exchange_volume_deception_in_china/
https://www.youtube.com/watch?v=2M12zzwNkCo&t=12m35s
https://www.reddit.com/r/Bitcoin/comments/21s8ea/bobby_lee_on_exchange_volume_deception_in_china/
https://www.youtube.com/watch?v=2M12zzwNkCo&t=12m35s
October 10, 2015, 11:49:48 PM
found this on reddit:
https://www.reddit.com/r/Bitcoin/comments/3o8onj/is_gemini_an_exchange_for_institutional_ants_24hr/cvvf9fa
"[–]BTCVIX 1 point 2 hours ago
I am in both agreement and disagreementat the same time with you & /u/realitycheck123456 so let me start with agreement side of things: there is clearly a pick-up in wash trading across Huobi, OKC, and Bitstamp -- yes even BitStamp although you seemed to gloss over that as it didn't fit neatly into your ethnocentric narrative of the Chinese boogeyman. Here is video of the OKC volumizer at work: https://twitter.com/BTCVIX/status/652179059263307776 -- here is Lock Ness monster style screen shots of OKC volumizer: http://imgur.com/a/GywMv -- now let me show you that Stamp is engaging in a similar volume washing although not to magnitude of the Chinese exchanges as Stamp does still have fees: http://imgur.com/a/NKvwl
All exchanges are somewhere on the bucket shop spectrum -- even trading on BATS is quasi-bucket shop so it is really a matter or being aware of what I agree is some form of volume washing spoofing but I am not so certain it actually has an intent other than to just inflate volume and appear more liquid then what some would deem as "reality" (more not this in a bit). It is very likely NOT the exchange but a very cozy MM that has some deal in place to provide X quota of volume or book depth per day in turn they get to feed off of the retail order flow probably not all that dissimilar then Flash Boys a la Michael Lewis.
I long ago stopped feigning outrage at these activities and have become a proponent of the "fake it till you make it" model of bootstrapping an exchange. Why do I say this ? Well it is a function of network effect as even the appearance of liquidity begets more liquidity so it becomes self-fulfilling. I actually would say this is a global trend in general as think of the social dating sites and their many socket puppet accounts to give the appearance of a deep pool of potential suitors. It ends up building upon itself and clearly it has offered some success -- I am not stating this as a perfect solution and it brings a whole host of other issues; however it does allow the business a fighting chance at the beginning because from my standpoint the only marketing angle I hear from the ghosttown exchanges is "our volume is REAL though" -- yes I am sure the 79 coins that traded on Gemini were "real" but I am very sure I could easily fill my positions in the 200k BTC of OKC wash trading even if only 5-10% of that was "real" whatever that means."
https://www.reddit.com/r/Bitcoin/comments/3o8onj/is_gemini_an_exchange_for_institutional_ants_24hr/cvvf9fa
"[–]BTCVIX 1 point 2 hours ago
I am in both agreement and disagreementat the same time with you & /u/realitycheck123456 so let me start with agreement side of things: there is clearly a pick-up in wash trading across Huobi, OKC, and Bitstamp -- yes even BitStamp although you seemed to gloss over that as it didn't fit neatly into your ethnocentric narrative of the Chinese boogeyman. Here is video of the OKC volumizer at work: https://twitter.com/BTCVIX/status/652179059263307776 -- here is Lock Ness monster style screen shots of OKC volumizer: http://imgur.com/a/GywMv -- now let me show you that Stamp is engaging in a similar volume washing although not to magnitude of the Chinese exchanges as Stamp does still have fees: http://imgur.com/a/NKvwl
All exchanges are somewhere on the bucket shop spectrum -- even trading on BATS is quasi-bucket shop so it is really a matter or being aware of what I agree is some form of volume washing spoofing but I am not so certain it actually has an intent other than to just inflate volume and appear more liquid then what some would deem as "reality" (more not this in a bit). It is very likely NOT the exchange but a very cozy MM that has some deal in place to provide X quota of volume or book depth per day in turn they get to feed off of the retail order flow probably not all that dissimilar then Flash Boys a la Michael Lewis.
I long ago stopped feigning outrage at these activities and have become a proponent of the "fake it till you make it" model of bootstrapping an exchange. Why do I say this ? Well it is a function of network effect as even the appearance of liquidity begets more liquidity so it becomes self-fulfilling. I actually would say this is a global trend in general as think of the social dating sites and their many socket puppet accounts to give the appearance of a deep pool of potential suitors. It ends up building upon itself and clearly it has offered some success -- I am not stating this as a perfect solution and it brings a whole host of other issues; however it does allow the business a fighting chance at the beginning because from my standpoint the only marketing angle I hear from the ghosttown exchanges is "our volume is REAL though" -- yes I am sure the 79 coins that traded on Gemini were "real" but I am very sure I could easily fill my positions in the 200k BTC of OKC wash trading even if only 5-10% of that was "real" whatever that means."
October 10, 2015, 10:57:46 PM
TLDR: It may be illegal to use fake volume trading bots now that the CFTC is involved in regulating bitcoins. Exchanges beware!!!
From the coindesk article about the CFTC getting involved in bitcoin:
http://www.coindesk.com/the-cftcs-not-so-hidden-message-traders-beware/
Also note the CFTC may "conduct extraterritorial enforcement actions in this area" :
http://www.coindesk.com/bitcoin-as-a-commodity-what-the-cftcs-ruling-means/
"
As highlighted by the TeraExchange case, US regulations prohibit a transaction that can be characterized as a “wash trade”, an “accommodation trade”, a “fictitious sale”, or a trade that “is used to cause any price to be reported, registered, or recorded that is not a true or bona fide price”. These provisions have been broadly applied to any situation where the CFTC believes the process by which a transaction occurs was not fair, open and competitive (unless otherwise provided for under its rules). And they create potential liability for the traders, not just the exchange.
For trades done on a CFTC registered platform, such as a SEF like TeraExchange or a contract market, there are specific prohibitions against (1) violating bids or offers, (2) intentional or reckless disregard for the orderly execution of transactions during a closing period, or (3) “spoofing”, which is defined in the statute as “bidding or offering with the intent to cancel the bid or offer before execution”. Spoofing is an area of particular CFTC attention recently.
There are prohibitions related to the theft or conversion and use of nonpublic information from the US government.
CFTC regulations broadly prohibit fraud in connection with any transaction under its jurisdiction. Technically, the language of one of the provisions reaches any cash commodity transaction in interstate commerce, although it is unlikely the CFTC wants to become the general overseer of fraud in all commercial marketplaces. But it does mean the CFTC may be able to exercise its discretion to bring a case if it otherwise becomes focused on a problem in the marketplace. Moreover, the relevant statute specifically prohibits a person from entering into a swap transaction “knowing, or acting in reckless disregard for the fact that its counterparty will use the swap as part of a ... fraud against a third party". The CFTC does not generally have to show actual intent to defraud, but can bring a case based on reckless conduct.
The CFTC has broad authority to police for manipulation. Here, the CFTC will look at manipulation not only directly in the derivatives market, but also in the “cash” market where it believes there is the potential for a price distortion effect on a related derivatives market. The CFTC does not need to prove actual intent to manipulate, but simply recklessness. And it has jurisdiction to seek serious sanctions, including fines of $1m per violation, and for attempted manipulation, which requires only evidence of the necessary state of mind (intent or recklessness) and an act that it can say was taken in furtherance of the manipulation."
From the coindesk article about the CFTC getting involved in bitcoin:
http://www.coindesk.com/the-cftcs-not-so-hidden-message-traders-beware/
Also note the CFTC may "conduct extraterritorial enforcement actions in this area" :
http://www.coindesk.com/bitcoin-as-a-commodity-what-the-cftcs-ruling-means/
"
As highlighted by the TeraExchange case, US regulations prohibit a transaction that can be characterized as a “wash trade”, an “accommodation trade”, a “fictitious sale”, or a trade that “is used to cause any price to be reported, registered, or recorded that is not a true or bona fide price”. These provisions have been broadly applied to any situation where the CFTC believes the process by which a transaction occurs was not fair, open and competitive (unless otherwise provided for under its rules). And they create potential liability for the traders, not just the exchange.
For trades done on a CFTC registered platform, such as a SEF like TeraExchange or a contract market, there are specific prohibitions against (1) violating bids or offers, (2) intentional or reckless disregard for the orderly execution of transactions during a closing period, or (3) “spoofing”, which is defined in the statute as “bidding or offering with the intent to cancel the bid or offer before execution”. Spoofing is an area of particular CFTC attention recently.
There are prohibitions related to the theft or conversion and use of nonpublic information from the US government.
CFTC regulations broadly prohibit fraud in connection with any transaction under its jurisdiction. Technically, the language of one of the provisions reaches any cash commodity transaction in interstate commerce, although it is unlikely the CFTC wants to become the general overseer of fraud in all commercial marketplaces. But it does mean the CFTC may be able to exercise its discretion to bring a case if it otherwise becomes focused on a problem in the marketplace. Moreover, the relevant statute specifically prohibits a person from entering into a swap transaction “knowing, or acting in reckless disregard for the fact that its counterparty will use the swap as part of a ... fraud against a third party". The CFTC does not generally have to show actual intent to defraud, but can bring a case based on reckless conduct.
The CFTC has broad authority to police for manipulation. Here, the CFTC will look at manipulation not only directly in the derivatives market, but also in the “cash” market where it believes there is the potential for a price distortion effect on a related derivatives market. The CFTC does not need to prove actual intent to manipulate, but simply recklessness. And it has jurisdiction to seek serious sanctions, including fines of $1m per violation, and for attempted manipulation, which requires only evidence of the necessary state of mind (intent or recklessness) and an act that it can say was taken in furtherance of the manipulation."
October 10, 2015, 10:41:32 PM
To the mods: I know bitstamp may pay/pressure you to relocate this thread to a part of the forum that will not see the light of day (already happened to my last thread) but please resist the urge to censor the forums and prove you are corrupt.
This thread will be dedicated to observing fake volume exchanges (including bots that execute real trades with 0% fees to make it seem like the exchange has many traders) and the effects of their actions on the BTC price/reputation (of bitcoin and also unregulated exchanges).
This may also help users understand the risks of using certain exchanges that are battling for a piece of the market once traders start to choose safer more reliable exchanges.
Also thanks to a reddit user for posting these images: http://imgur.com/a/NKvwl
https://www.reddit.com/r/Bitcoin/comments/3o8onj/is_gemini_an_exchange_for_institutional_ants_24hr/cvvf9fa
This thread will be dedicated to observing fake volume exchanges (including bots that execute real trades with 0% fees to make it seem like the exchange has many traders) and the effects of their actions on the BTC price/reputation (of bitcoin and also unregulated exchanges).
This may also help users understand the risks of using certain exchanges that are battling for a piece of the market once traders start to choose safer more reliable exchanges.
Also thanks to a reddit user for posting these images: http://imgur.com/a/NKvwl
https://www.reddit.com/r/Bitcoin/comments/3o8onj/is_gemini_an_exchange_for_institutional_ants_24hr/cvvf9fa
Jump to: