Investors witnessed an abnormal influx of fake crypto trading volume on the South Korean exchange, Bithumb almost every day over the last one week. This gave rise to suspicions quite obviously in their minds. No doubts markets can often be erratic on a day-to-day basis. But the volatility and unpredictability in the crypto market are unprecedented.
An Argentinian crypto trader and analyst, Alex Kruger took to Twitter on August 2 to reveal that something suspicious was going on in terms of the trading volume at the Bithumb exchange. In a bid to bring more clarity to the situation, Kruger later issued a “tweetstorm”. The commentator highlighted Bithumb’s “airdrop” in his opening tweet. He noted how an event that was presumably created in goodwill by the exchange directly caused over $250 million in fake volume to be traded on a daily basis starting August 25.
To back his claim of fake crypto trading volume, Kruger then drove into the statistics. The analyst firstly highlighted Bithumb exchange’s airdrop system. After crunching the number, Kruger went on to add that for traders to claim the entire $900,000 rebate, a group of traders or a single trader will have to incur over $250 million of trade volume in a single day.
There currently are USD 250 million of fake volume traded at Korean crypto exchange Bithumb, every day at 11AM Korean Time, since August/25. Tweetstorm covers the math behind it in simple terms. #washtrading illustrated.
— Alex Krüger 🇦🇷 (@Crypto_Macro) September 2, 2018
Kruger further highlighted the fact that since it is a “first come, first served” kind of system, it is quite clear that some traders decided to game the system. They did so by manufacturing over $250 million in wash volumes within minutes to claim the entire trading fee airdrop in full. He said that after deducting the trading fees, those traders who partake in the wash trading scheme will apparently rake in over $150,000 every single day or till the exchange’s promotional airdrop ends, as stated in the NewsBTC report.
The Bithumb exchange has however not commented on this situation pertaining to the alleged fake crypto trading volume highlighted by Kruger. When asked as to how bad the consequences of this fake volume can get, Kruger estimated that in order for a trader to collect the full KRW1 bullion rebate, a wash trader will have to trade KRW 278 billion. This amounts to $250 million in daily fake volume, he added, as stated in the Bitcoin Exchange Guide report.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]