Why do exchanges get away with faking trade volume?

mersal

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Quote from: NotATether on August 08, 2020, 06:24:26 AM

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned. And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Its easy to make an exchange on your own but it is not going to be easier to make people trading on it, even the exchanges are legit and promoting them for huge money are struggling to get their traders.And exchanges with low transaction and withdrawal fees attract the users more.

And about the fake volume, because they wanted to make into the top of the list so they are giving fake volume for most of the coins by trading internally with their bots just to record the orders.

Spaffin

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Quote from: bearexin on August 12, 2020, 09:51:38 AM

Because nobody can stop them? I mean that looks like the only reason at all, if there was power of people that could stop exchanges stop doing that, I would think that we would all do it, however there is no way that people could stop it, neither does the competition so they end up doing it without any consequences.

On top of that, when one place does it and others don't, that place gets an advantage and everyone thinks they are doing great, however other places wouldn't accept it, so they end up doing it to level the playing field as well, which is why right now it is so common since places basically all try to mimic each others shady stuff in order to get ahead but if not at least not stay behind. All of this could end if somehow there is regulations on them.

All kinds of manipulations with trading volumes, this is a kind of fraud on the part of the management of the cryptocurrency exchange. I believe that their actions may fall under some article of the Criminal Code, but whether they can be held accountable is a completely different issue that requires careful study.

bearexin

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Because nobody can stop them? I mean that looks like the only reason at all, if there was power of people that could stop exchanges stop doing that, I would think that we would all do it, however there is no way that people could stop it, neither does the competition so they end up doing it without any consequences.

On top of that, when one place does it and others don't, that place gets an advantage and everyone thinks they are doing great, however other places wouldn't accept it, so they end up doing it to level the playing field as well, which is why right now it is so common since places basically all try to mimic each others shady stuff in order to get ahead but if not at least not stay behind. All of this could end if somehow there is regulations on them.

Dorodha

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In making new exchanges we need to be careful about trading volumes and be careful In the case of trade these are not equally affected everywhere. Due to the dependence of the trading volume the exchanges move away with the amount of fake trade. Having knowledge of other sites will reduce the risk and it will be much easier to find good promotions every site has a specific logo. If you follow the logo it is very difficult to copy.

imstillthebest

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Quote from: Shasha80 on August 11, 2020, 06:52:37 PM

If you look at the number of exchanges currently in circulation it has proven that opening exchanges is very easy.
But it's not easy to draw interest of many users, there should be a good promotion to make more users join the new
exchanges. One way to attract interest users by making faking trade volume. Because some users especially newbies
choose exchanges based on trading volume, even though they are nowadays easily manipulate trading volume with bots.
So avoid choosing exchanges based on volume trading.

volume is essential when trade and if not volume , what would be the next thing to look for ? with the huge number of scams thats a way to tell that they can attract people easily .

so many exchanges that are fake are already got busted , mostly with the issue of fake volume . they didnt get away with it . if only people will only buy and sell coins on the trusted exchange no one will get scam , thats also thier fault .

Shasha80

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If you look at the number of exchanges currently in circulation it has proven that opening exchanges is very easy.
But it's not easy to draw interest of many users, there should be a good promotion to make more users join the new
exchanges. One way to attract interest users by making faking trade volume. Because some users especially newbies
choose exchanges based on trading volume, even though they are nowadays easily manipulate trading volume with bots.
So avoid choosing exchanges based on volume trading.

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Quote from: Kelvinid on August 11, 2020, 12:17:32 PM

We can't make all things to be good to be true. That is in a real case scenario.

And with that fake volume show some interest to the people, definitely, it makes sense but seeing a bad effect on it, not only in a particular exchanger who abuses that but as crypto in general. This why newcomers have that struggles to find good and reputable exchangers because if we just search online, a lot or exchanges showing impressive reviews, a huge market volume which is really enticing.

It is really tricky and it makes a reason why people badly slip into fake exchangers with fake volume as being manipulated.

For people that dont have much time on making out some searches would definitely end up on exchangers which arent that known.Yeah you're right that faking out numbers will really give out

impact which people do really have that kind of impression that theyre dealing with a good one since it do shows huge volume which can signifies that there are lots of users

who do trade on such place.sooner or later that user will surely realize that he had dealt on the wrong place.This is why its important to have verification from time to time.

wxa7115

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Quote from: NotATether on August 08, 2020, 06:24:26 AM

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned. And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

This is not as difficult to guess, exchanges can get away with it because many users decide to turn a blind eye, if you want to use one of the most reputable exchanges out there you're probably going to have to go through know your customer policies and even if you don't have to go through those policies you will not have access to all kind of exotic coins that are out there.

Traders and investors decide to ignore the fake volume because they prefer to avoid know your customer policies and to trade coins that we know will crash in a matter of weeks or months with the hope of being one of the few that earn money out of those coins, as you can see the old model of supply and demand is at work, so if there was not a demand for exchanges like that then they will not exist.

Kelvinid

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We can't make all things to be good to be true. That is in a real case scenario.

And with that fake volume show some interest to the people, definitely, it makes sense but seeing a bad effect on it, not only in a particular exchanger who abuses that but as crypto in general. This why newcomers have that struggles to find good and reputable exchangers because if we just search online, a lot or exchanges showing impressive reviews, a huge market volume which is really enticing.

It is really tricky and it makes a reason why people badly slip into fake exchangers with fake volume as being manipulated.

tvplus006

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Quote from: carlisle1 on August 09, 2020, 11:42:20 AM

Quote from: Mpamaegbu on August 09, 2020, 10:41:23 AM

I have wondered this too myself on why exchanges playing this deceit of falseness with trading volume are left unpunished. It's a burden on the entire crypto space.

Exchange are doing this to attract traders to use their platforms, you will only realized this once you are already being trapped, there's a big need of doing your research about both the projects and the exchange that you'll going to use before you take your chance to avoid losing your money.

I didn't notice when this feature appeared on Coinmarketcap, but a couple of days ago I was surprised by this rating. This way you can track the volume of coins you are interested in on various exchanges. But I would be interested to know how coinmarketcap calculates these values.

Harlot

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Quote from: Mahanton on August 10, 2020, 04:54:03 PM

Quote from: Harlot on August 10, 2020, 11:04:56 AM

I do think you are talking about unlicensed exchanges here since they can easily get away with it without any authorities noticing it. For licensed and legally operating exchanges it will be harder for them to cheat and mislead their users as their data is always monitored by their country's SEC. I know that if they have produced fake volume on their exchanges they will be investigated right away since users will also report/complain about it. For unlicensed exchanges where they will barely have any customers will really get away with this since they aren't part of any surveillance like what a legal company is always is.

Centralized exchangers do really abide with some laws and regulations which the thing you said was actually right but they arent really that strict compared to forex/stocks
market which manipulation isnt really that too obvious but its surely there its surely does exist.The thing here on crypto is that it cant really be that detected since
we do have huge volume plus having lots of coins that had been traded on where each user wont really bothering that much when it comes to an exchange liquidity
or volume.Back in the past where there are reports about wash trading which isnt really that surprising to happen into this market.

Having "huge volumes" in an exchange isn't really a factor here if it is this will make it easier for the authorities to track them down as faking larger volumes of traders will be make it easier for them to catch the manipulation going on. Take US for example a bunch of analysis companies are helping them like Chainalysis this company has help them a lot on not only tracking down criminals but also anomalies and discrepancies happening in registered exchanges. With crypto exchanges being more regulated I doubt that they can even do large scale of data manipulation knowing that they are always someone's radar.

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Because they set up their companies in countries that don't give a flying fuck about what they do.

If this was a traditional trading platform, these wash trading exchange would be shut down immediately and the founders and participants would be charged with market manipulation. But because cryptocurrencies aren't regulated in most places, the government just doesn't care.

Plus, people continue to trade on these platforms, either because they're not aware that they are wash trading or because they somehow think it doesn't affect them.

I personally think CoinMarketCap, CoinGecko, and similar platforms are largely to blame for the continued success of exchanges that fake their volume. They should have a big bold stamp next to any exchange that has been proven to boost its volumes with dubious practices like wash trading. They are one of the main sources newbies use to find trading pairs and new exchanges, it is their duty to provide this information.

Mahanton

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Quote from: Harlot on August 10, 2020, 11:04:56 AM

I do think you are talking about unlicensed exchanges here since they can easily get away with it without any authorities noticing it. For licensed and legally operating exchanges it will be harder for them to cheat and mislead their users as their data is always monitored by their country's SEC. I know that if they have produced fake volume on their exchanges they will be investigated right away since users will also report/complain about it. For unlicensed exchanges where they will barely have any customers will really get away with this since they aren't part of any surveillance like what a legal company is always is.

Centralized exchangers do really abide with some laws and regulations which the thing you said was actually right but they arent really that strict compared to forex/stocks
market which manipulation isnt really that too obvious but its surely there its surely does exist.The thing here on crypto is that it cant really be that detected since
we do have huge volume plus having lots of coins that had been traded on where each user wont really bothering that much when it comes to an exchange liquidity
or volume.Back in the past where there are reports about wash trading which isnt really that surprising to happen into this market.

Harlot

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I do think you are talking about unlicensed exchanges here since they can easily get away with it without any authorities noticing it. For licensed and legally operating exchanges it will be harder for them to cheat and mislead their users as their data is always monitored by their country's SEC. I know that if they have produced fake volume on their exchanges they will be investigated right away since users will also report/complain about it. For unlicensed exchanges where they will barely have any customers will really get away with this since they aren't part of any surveillance like what a legal company is always is.

tvplus006

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I have already thought about this question before and the only correct solution to this problem is that Coinmarketcap must have its own bot on each exchange to correctly enter data about volumes in the rating. But given that the rating is owned by Binance, it may look like espionage.

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Quote from: DevilSlayer on August 10, 2020, 02:51:56 AM

Actually it is easy to identify if a certain exchanges are saying the truth or they keep making illusion in order to create fake volume by looking at the bids and asks board where there should be no gap and the tick should be close to each other, the reason why some exchanges are creating fake volume is simply because they want to create hype where they want many traders to use their exchange. Fake volume is a threat especially if we have large capital because we can be stuck if there is low liquidity.

there is also other reason like many project here is looking to be listed in exchange that have a high daily volume .they make it to have more potential customer from a project that looking for an exchange that they will list a project and asked only small fees for listing .,And newly project can easily fall in that since that is what they are looking .

Its easy to identify however not all is willing to take some time to check it.

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Quote from: MCobian on August 10, 2020, 02:27:56 AM

Many people choose exchanges based on trading volume, but not all trading volume are real. You should not choose exchanges
based on trading volume, because it is easy to manipulate trading volume. It is true that it is very easy to open new exchanges,
But for the exchanges you have a lot of users it is very difficult. Because a good promotion is needed and also must a listing of
profitable coins. Regarding the legality of being able to choose centralized exchanges, usually already regulated by the government.
It is true that centralized exchanges are safer, but we are obliged to provide KYC procedures.

Actually it is easy to identify if a certain exchanges are saying the truth or they keep making illusion in order to create fake volume by looking at the bids and asks board where there should be no gap and the tick should be close to each other, the reason why some exchanges are creating fake volume is simply because they want to create hype where they want many traders to use their exchange. Fake volume is a threat especially if we have large capital because we can be stuck if there is low liquidity.

MCobian

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Many people choose exchanges based on trading volume, but not all trading volume are real. You should not choose exchanges
based on trading volume, because it is easy to manipulate trading volume. It is true that it is very easy to open new exchanges,
But for the exchanges you have a lot of users it is very difficult. Because a good promotion is needed and also must a listing of
profitable coins. Regarding the legality of being able to choose centralized exchanges, usually already regulated by the government.
It is true that centralized exchanges are safer, but we are obliged to provide KYC procedures.

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Quote from: carlisle1 on August 09, 2020, 11:42:20 AM

Quote from: Mpamaegbu on August 09, 2020, 10:41:23 AM

I have wondered this too myself on why exchanges playing this deceit of falseness with trading volume are left unpunished. It's a burden on the entire crypto space.

Exchange are doing this to attract traders to use their platforms.

But of course, it's obvious. But my concern is why can't these defaulting exchanges be punished and exposed?

Quote from: carlisle1 on August 09, 2020, 11:42:20 AM

...there's a big need of doing your research about both the projects and the exchange that you'll going to use before you take your chance to avoid losing your money.

Honestly, this DYOR thing people keep hammering here is not that easy as they paint the picture. It takes an experienced person to carry out, not just any person. Otherwise, all one's efforts attempting the DYOR thing would be one merely staring at websites. We shouldn't also be in a hurry to forget that even veteran members here also get caught in this web of deceit while in research too.

Twentyonepaylots

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Quote from: Charles-Tim on August 08, 2020, 06:49:49 AM

Quote from: NotATether on August 08, 2020, 06:24:26 AM

Does anyone else agree that it's way too easy to open an exchange nowadays,

It is not easy to open a safe and reputed exchange, but can be easy for scammers to set up a fake exchange.

Scammers these days are skilled and wise, they are ready to fake an exchange though it is hard that one, hard to get a client but that's they thing, if they fail they'll just have to move on and yes they got a lot of fund, they just keep upgrading and upgrading their schemes out of the money they got from the past scams. It ain't easy to open an exchange nowadays, I must say.

Quote from: Charles-Tim on August 08, 2020, 06:49:49 AM

Quote from: NotATether on August 08, 2020, 06:24:26 AM

And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

There are scam in forex too but no opportunity to create new fiat money as all are centralized and owned by countries. Unlike, cryptocurrencies, they are decentrlaized and can be created by anybody, that is why some are subjected to pump and dump.

This is why investors have quit investing, this is true actually and I pity those projects that is legitimate but lacks of support coz most of investors think that it is a another scam project.

Quote from: Charles-Tim on August 08, 2020, 06:49:49 AM

Quote from: NotATether on August 08, 2020, 06:24:26 AM

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

That does not mean it is not happening in forex, a lot of scams that happen in crypto is occuring in forex too

Quote from: NotATether on August 08, 2020, 06:24:26 AM

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Imo, if you are talking about centralized crypto exchanges, they are also well regulated but there are some ways scam can be legit, a good example is the puming and dumping of coin. Aside forex, let me use a well reguated organization for you, have service sim provider scammed you before? They can scam people with as little as $0.1 dollar, why government never done anything?

Imo, not that crypto exchanges are not regulated, there are shady scam in forex too and it is everywhere like that. It is we that should be careful.

Scams are everywhere and we all should be wary of that, not just in forex, not just in crypto, even in real life, so it is better to have an actual knowledge than just knowing what a scam is.

cryptoperkele

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This will change in some time. Right now regulators are just catching up with this wild west and we really don't care about wash trading enough to even avoid such exchanges. It's like an open secret, almost everyone has been doing all along it but we have focused on exit scams / ico scams and stuff like that.

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Quote from: spike420211 on August 09, 2020, 07:21:34 AM

Wait. Who makes investors invest their money in fraudulent projects and exchanges of this kind?
Answer - Nobody.

You yourself decide where to invest your money. Nobody can deceive you if you yourself do not believe in deception.
There are hundreds of such exchanges with varying degrees of truthfulness, but it depends only on you whether you get into this ass or not.

If investors were smarter, these kinds of exchanges would never stand a chance.

But sadly people still invest in these scam exchanges. People are so greedy that if those exchanges offer some bonus etc, people will rush and invest in those exchanges. Offering zero trading fee is another reason people trade at those exchanges. Sad

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Quote from: Mpamaegbu on August 09, 2020, 10:41:23 AM

I have wondered this too myself on why exchanges playing this deceit of falseness with trading volume are left unpunished. It's a burden on the entire crypto space.

Exchange are doing this to attract traders to use their platforms, you will only realized this once you are already being trapped, there's a big need of doing your research about both the projects and the exchange that you'll going to use before you take your chance to avoid losing your money.

Quote

Yes, I know the industry isn't regulated yet (as it should be, apart from the KYC stuff), however I think something critical should be done in stopping exchanges from displaying fake trading volume by exposing and sanctioning defaulters.

It's a good call for every traders and investors to avoid this kind of activities around exchange who are actively faking their volumes, without any takers this exchange will start to realized if they want to stay in the business they need to work with what traders and investors needs.

Quote

If this is done, it will go a long way in restoring investors' and traders' confidence in the industry like we have with Forex Trading.

Correct, exchange that being tag doing this will be avoided by traders, it will be a big damage to their service.

Mpamaegbu

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I have wondered this too myself on why exchanges playing this deceit of falseness with trading volume are left unpunished. It's a burden on the entire crypto space. Yes, I know the industry isn't regulated yet (as it should be, apart from the KYC stuff), however I think something critical should be done in stopping exchanges from displaying fake trading volume by exposing and sanctioning defaulters. If this is done, it will go a long way in restoring investors' and traders' confidence in the industry like we have with Forex Trading.

Insanerman

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Quote from: thesmallgod on August 08, 2020, 09:02:04 AM

The question is who will regulate them ? Many of this exchange are new exchange platform that exchange listing of shitcoin for new traders but get stuck in continuous listing of bad project. They also fake volume to rank higher in coinmarketcap and other crypto trading monitoring sites. Unless people stop patronizing them, they will never stop this. Some of them don't even have physical address which make it difficult to even sue or get then regulated

I think they do not care eve if the coin is shit or not. What matters to them is that they are getting payments from the owners of those coins or tokens.
The more tokens that will be listed on their exchange, the more money they can get.
Fake volumes are used by them to attract traders to invest on that particular coin.

It's illegal but it's hard to regulate them these days...

spike420211

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Wait. Who makes investors invest their money in fraudulent projects and exchanges of this kind?
Answer - Nobody.

You yourself decide where to invest your money. Nobody can deceive you if you yourself do not believe in deception.
There are hundreds of such exchanges with varying degrees of truthfulness, but it depends only on you whether you get into this ass or not.

If investors were smarter, these kinds of exchanges would never stand a chance.

CryptopreneurBrainboss

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Quote from: NotATether on August 08, 2020, 06:24:26 AM

but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Not just your opinion but that's the truth, we're not in an industry dominate by the government and few big power houses that detect how the industry should be operated or is that want you were hoping the crypto industry.would be? Sorry to disappoint but we're in a free market, although weren't seeing much of decentralization thesw days but that's what the industry was built for. The scammers are taking advantage of this feature to scam gullible Investors off their capital but that's all on them and if I was to fall victim that's also on my for not doing proper research.

The OG in the industry foresaw all these distractions coming that's why they advocated for the abstaince of patronizing any garbage advertising themselves as some world class problem solvers using blockchain technology so if you fall for scam project using scam exchanges that's your problems. Why use new exchange you have no idea about when the current is serving you right?

buwaytress

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Quote from: rexxarofmoknathal on August 08, 2020, 01:14:05 PM

That's the limbo we're all facing. Many crypto sectors could get away without complying to any regulations because there's no requirement but then we users should know better right? And that's why forums like these exist.

This is not to say that all platforms are meddling with numbers and such but the prevalence is high. Consumer protection and licensing might unravel a new hole shite pile of trouble at least when done traditionally, but this is something many finance sectors are dealing with - its not easy.

The bottom line is to always be protective over your money no matter in which platform it goes into. Oh yeah, and read the small prints!

We users should definitely know better and I know from my own personal experience that it is possible to be educated. I spent about THREE whole years being misinformed about Bitcoin before an accident and recovery gave me all the time in the world to actually sit down, read and understand it better. I felt like an idiot, but you know, we learn. And hopefully I've made the difference for a lot of people also (not by telling them about Bitcoin, but helping those seeking answers find them).

Always take responsibility, that is 100% the key!

eaLiTy

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Quote from: NotATether on August 08, 2020, 06:24:26 AM

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned. And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

The only solution is strict regulation for exchanges to operate and taking a bank guarantee while listing the coins so that the developers will not dump the coins and run away. It is not that hard to start an exchange and anyone with basic knowledge of coding can come up with an exchange.

Quote from: NotATether on August 08, 2020, 06:24:26 AM

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Almost all of the exchanges in the cryptocurrency market shows fake volumes to attract the user base and as long as there is no regulation there is nothing you can do about it. There should be strict regulations for exchanges and for new projects that are raising money and there should be strict monitoring on how they are making use of that money.

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Quote from: rodskee on August 08, 2020, 11:54:56 PM

Quote from: Oilacris on August 08, 2020, 05:13:39 PM

That's because crypto market is not really that heavily regulated. You wont need any permits or wont really be that necessary for someone to create their own platform.

Yeah and like what OP have mentioned, You just need to form a team and buy 3rd party
system, with decent fund you are good to go.

Quote from: Oilacris on August 08, 2020, 05:13:39 PM

This is why people should really be careful on because we know that once transactions had been done like depositing then it cant be reverted nor can be traced

Research and find more information about exchange that you'll going to use, it's frustrating
losing your money in such kind of act.

Quote from: Oilacris on August 08, 2020, 05:13:39 PM

when the owners of such exchange tends out to ran all of the investors money and that's one of the few main reasons.

Pain in the ass once the owner run away and bring all the money with them, no regulation
and no trace, they will just disappear.

Setting-up is easy but earning trust from users is hard so if you just want to set-up a fly-by-night exchange, you can always do so but don't expect that many users will just deposit blindly. And most crypto users are now smarter than before because of these hacking incidents as well as crypto exchanges shutting down their business, so they are really careful in using exchanges especially those small and low volume exchanges. Wash trading is common among them but you will know if they are doing it once you are familiar with the trading patterns and background of the coin.

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Quote from: Oilacris on August 08, 2020, 05:13:39 PM

That's because crypto market is not really that heavily regulated. You wont need any permits or wont really be that necessary for someone to create their own platform.

Yeah and like what OP have mentioned, You just need to form a team and buy 3rd party
system, with decent fund you are good to go.

Quote from: Oilacris on August 08, 2020, 05:13:39 PM

This is why people should really be careful on because we know that once transactions had been done like depositing then it cant be reverted nor can be traced

Research and find more information about exchange that you'll going to use, it's frustrating
losing your money in such kind of act.

Quote from: Oilacris on August 08, 2020, 05:13:39 PM

when the owners of such exchange tends out to ran all of the investors money and that's one of the few main reasons.

Pain in the ass once the owner run away and bring all the money with them, no regulation
and no trace, they will just disappear.

Oilacris

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Quote from: NotATether on August 08, 2020, 06:24:26 AM

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned. And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Thats because cryptomarket is not really that heavily regulated.You wont need any permits or wont really be that necessary for someone to create their own platform.

This is why people should really be careful on because we know that once transactions had been done like depositing then it cant be reverted nor can be traced

when the owners of such exchange tends out to ran all of the investors money and thats one of the few main reasons.

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It is not that it is very easy to open an Exchange, what happens is that Exchanges are a great business model, the advantage is that you can see all the positions, stops, resistances and supports, having that information is very easy to do some win-win movements, and not counting the different plans offered to Market Makers.

figmentofmyass

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Quote from: NotATether on August 08, 2020, 06:24:26 AM

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned. And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

i actually don't mind. i've been around in this space long enough to easily sniff out scam exchanges and fake volume. i am more so mystified at how noobs always seem to end up on these unknown scam exchanges that are clearly faking volume and have no real liquidity. why? how? why don't they do any research on the exchanges they are entrusting their coins to?

it's too bad we live in a nanny state society where investors feel no need to do due diligence in their business relationships and investments. tbh, the truth is that most noobs need to get scammed once or twice before learning their lesson. there's no way around it IMO.

Quote from: RapTarX on August 08, 2020, 01:39:22 PM

Exchanges do not directly report fake volume rather they use bot trading which increases their volume at the end of the day.

lots of exchanges completely fake volume and liquidity. they spoof orders on both sides and use algorithms to multiply the reported volume vs actual volume traded.

exchanges can't easily use bots to pump volume with real trades. that's a very quick route to insolvency since real traders would be eating up their "fake" liquidity.

RapTarX

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Exchanges do not directly report fake volume rather they use bot trading which increases their volume at the end of the day. However, there's none much of regulatory body who could look at deeply.
However, there's metric in crypto tracking sites like coinmarketcap by which one can easily detecr whether exchange is using fake trading.

The Sceptical Chymist

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Quote from: NotATether on August 08, 2020, 06:24:26 AM

If a stock were to do this, their owners would go to jail.

Indeed they would, but I think it would be a lot harder to try to set up a fake stock brokerage these days than it would be for a crypto one. Stock market investors tend to stick with the brokers with big names and long track records, and I don't think many of those investors would be willing to try out a new broker. Also I think these fly-by-night crypto exchanges operate out of countries where there's little regulation, which is why they can get away with some of the shit they pull.

It amazes me that exchanges like Yobit are still around, given some of the garbage coins they offer, some of which probably don't even exist. Obviously no government regulator is paying attention to them, or they don't care.

Quote from: NotATether on August 08, 2020, 06:24:26 AM

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Again, I think this is a function of what country the exchange is operating out of. It's also partly a problem of the websites that report that volume data, like CMC and coingecko. Doesn't seem like there's a lot of fact checking going on.

Crazy that crypto is over ten years old and we're still kind of in the wild west days as far as these things go. I don't think it's going to stay like this forever, but it sure as hell is interesting to see while it's happening.

rexxarofmoknathal

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Quote from: buwaytress on August 08, 2020, 11:43:03 AM

It is too easy. And that is a problem, and I think we are always faced with the dilemma all across the sectors in crypto. Trading, exchange, gambling, mixing, basically any service, not only trading...

What should we do? Fight for more consumer protection, so more licensing and more regulation? But Huobi, Bittrex, Coinbase, are all regulated just in different jurisdictions and all have been or are guilty of wash trading.

That's the limbo we're all facing. Many crypto sectors could get away without complying to any regulations because there's no requirement but then we users should know better right? And that's why forums like these exist.

This is not to say that all platforms are meddling with numbers and such but the prevalence is high. Consumer protection and licensing might unravel a new hole shite pile of trouble at least when done traditionally, but this is something many finance sectors are dealing with - its not easy.

The bottom line is to always be protective over your money no matter in which platform it goes into. Oh yeah, and read the small prints!

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Quote from: NotATether on August 08, 2020, 06:24:26 AM

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned. And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

There are forex scam platforms! Most of them work as a ponzie and pyramid schemes. And they usually end up scamming money from people and then running away. Most of them do get caught and receive penalties and punishments.
The same thing happens in crypto exchanges. They make a fake exchange and report fake volumes. They list shitcoins because they get paid for it. It is the responsibility of the user to choose a legit platform and avoid those scam exchanges.

buwaytress

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It is too easy. And that is a problem, and I think we are always faced with the dilemma all across the sectors in crypto. Trading, exchange, gambling, mixing, basically any service, not only trading...

What should we do? Fight for more consumer protection, so more licensing and more regulation? But Huobi, Bittrex, Coinbase, are all regulated just in different jurisdictions and all have been or are guilty of wash trading.

And what precisely are the boundaries for wash trading anyway?

Protect all you want but until people actually stop using meaningless numbers to make their decisions (and we know people are dumb), I feel it's all pointless.

You'll always be lagging if you play that game. Better to educate, spread awareness, disseminate information, weed out misinformation. Support good data, flag bad ones.

Can't save all the idiots.

Yamifoud

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Quote from: NotATether on August 08, 2020, 06:24:26 AM

...
And then other exchanges blatantly misreport their trading volume as much higher than it actually is.

It was a big attraction for any exchanges. Huge trading volume exchanges are what traders had looking at this time and it is very unfortunate how these exchanger's owners want to take that opportunity and to lie people around. It is to imagine how money works, paid those reviews just to be good to look at but behind that reviews, it finds different from the actual scenario. That is why I don't rely on reviews but rather to try and to find out.

Quote from: NotATether on August 08, 2020, 06:24:26 AM

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Well, that regulation will give some help to stop these fake volume and illegalities but I don't know how it affects the market reputation since almost all exchangers do that, even those reputable exchanges may have that kind of troubles.

mk4

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It's pretty simple: because a lot of those scammy ones are unregulated or regulated in shady countries. And like you said, they can buy the software, and simply modify the UI/UX to their liking to make it "unique" enough. They're just easily getting away simply due to the pseudonymous nature of cryptocurrencies. If we're going to compare them to other finance platforms, of course the finance platforms would easily get screwed because most of them needs banking.

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Quote from: NotATether on August 08, 2020, 06:24:26 AM

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned. And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Exchanges with more volumes will attract more traders that is why we see fake volumes but exchanges report fake volumes are easy to find but most of the legit exchanges do it via wash trading so they make it look like legit trading activities going on there.Anyway regulating is not going to be easy because still many governments not aware of their existence so they are taking advantage of it.

elda34b

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Quote from: NotATether on August 08, 2020, 07:35:53 AM

With many scams posing as exchanges displaying a UK company license on their site, how come the FCA isn't monitoring them?

Maybe you should ask the FCA then. I honestly doubt that license holds any meaning since I see many wallet acquired the license to run digital wallet services, so not exactly implying that the regulators would monitor their activity. But this thing will gradually slow down when countries begin taking crypto seriously. After all, this industry is still very young, not even 20 years old yet.

thesmallgod

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The question is who will regulate them ? Many of this exchange are new exchange platform that exchange listing of shitcoin for new traders but get stuck in continuous listing of bad project. They also fake volume to rank higher in coinmarketcap and other crypto trading monitoring sites. Unless people stop patronizing them, they will never stop this. Some of them don't even have physical address which make it difficult to even sue or get then regulated

gentlemand

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It wouldn't matter if 199 countries set up the most exquisite regulation in existence, if the 200th doesn't that's where all such places will end up. Most customers won't know any different, or care.

This is a symptom of the medium it lives on. It ain't changing. There'll always be enough morons who run straight into the arms of these fuckholes. The best thing that can happen is that the best platforms keep improving.

GreatArkansas

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Quote from: NotATether on August 08, 2020, 06:24:26 AM

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned.
(....)

Kind of easy, but the difficult here are the users will use your exchange for sure, especially your exchange is kinda new and not popular, especially there are lot of old exchanges that are popular and trusted for how many years by some people.
About this faking the trade volume, it's now become natural and common for some people, because whatever the exchange reported, that's what we believe, right? So, we should not always believe on those numbers.

NotATether

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Quote from: Jating on August 08, 2020, 07:06:48 AM

Quote from: NotATether on August 08, 2020, 06:24:26 AM

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned.

Compliance to who? but I would agree that it is very easy because no one will audit your trading platform.

That's the problem. There is no regulatory body set up for monitoring cryptocurrency exchanges, or bodies that I know of who have expanded their operations to crypto exchange monitoring within their own country. Just like there are regulators like ASIC and CySEC that monitor their own countries' exchanges, they should at least include crypto exchanges operating in their country.

This brings something to mind. With many scams posing as exchanges displaying a UK company license on their site, how come the FCA isn't monitoring them?

Jating

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Quote from: NotATether on August 08, 2020, 06:24:26 AM

Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned.

Compliance to who? but I would agree that it is very easy because no one will audit your trading platform.

Quote from: NotATether on August 08, 2020, 06:24:26 AM

And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

And as much as we hate this fraudulent practice, this is open and free market. No central authority to manage this exchanges.

Quote from: NotATether on August 08, 2020, 06:24:26 AM

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Again, still boils down to crypto being unregulated. And there are people who are going to exploit it as there are no regulations and it is based on "trust". So the best weapon is to really check out the exchange that you want to use.

And there is this website: https://www.bti.live/. You can used it as a reference.

Charles-Tim

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Quote from: NotATether on August 08, 2020, 06:24:26 AM

Does anyone else agree that it's way too easy to open an exchange nowadays,

It is not easy to open a safe and reputed exchange, but can be easy for scammers to set up a fake exchange.

Quote from: NotATether on August 08, 2020, 06:24:26 AM

And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

There are scam in forex too but no opportunity to create new fiat money as all are centralized and owned by countries. Unlike, cryptocurrencies, they are decentrlaized and can be created by anybody, that is why some are subjected to pump and dump.

Quote from: NotATether on August 08, 2020, 06:24:26 AM

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

That does not mean it is not happening in forex, a lot of scams that happen in crypto is occuring in forex too

Quote from: NotATether on August 08, 2020, 06:24:26 AM

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Imo, if you are talking about centralized crypto exchanges, they are also well regulated but there are some ways scam can be legit, a good example is the puming and dumping of coin. Aside forex, let me use a well reguated organization for you, have service sim provider scammed you before? They can scam people with as little as $0.1 dollar, why government never done anything?

Imo, not that crypto exchanges are not regulated, there are shady scam in forex too and it is everywhere like that. It is we that should be careful.

NotATether

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Does anyone else agree that it's way too easy to open an exchange nowadays, you just assemble a team and buy some trading platform software from a third party and set up your site, compliance be damned. And then some of them do things like listing scamcoins that can be predicted to become worthless, ripping off investors. If a stock were to do this, their owners would go to jail.

And then other exchanges blatantly misreport their trading volume as much higher than it actually is. If a regulated forex platform would to do this, they would be heavily fined.

Sure forex has their own share of scam platforms but in my opinion it is way too easy to set up an crypto exchange without worrying about the legal aspects. There should be more scrutiny and regulation around exchanges.

Topic: Why do exchanges get away with faking trade volume? (Read 400 times)