Cryptocurrency Exchanges are the backbone to the value of just about all the Cryptocurrencies, without these easy in-roads to a digital asset (or should we say securities) it doesn’t matter how good the project or use case might be, without a means of public purchase it’s unlikely to gain any traction in the space.
So with this in mind it comes as little surprise to hear that some exchanges are taking advantage of this little fact:
Fake trading is not particularly unusual in regulated markets where it is illegal, so to find fake trading in a highly unregulated environment such as cryptocurrency trading shouldn’t shock you – but the extent to which these kinds of activity appear to be dominating the space should raise a few concerns.
The snapshots above of what appear to be a communication from a Top 30 exchange was from Roy Huang founder of Fresco which has proclaimed itself as ‘the world’s first blockchain art asset network’.
We also know that Cryptocurrency exchanges are also charging ridiculously high fee’s for new Cryptocurrencies wanting to be listed onto exchanges. An article from Business Insider revealed how some exchanges are charging as much as $1 million to list ICO’s.
Cryptocurrency exchanges are charging up to $1 million to list initial coin offerings on their platforms, according to multiple industry sources.
Around half a dozen market participants, from investors to CEOs of companies with their own coins, told Business Insider that some exchanges are charging anywhere between $50,000 to $1 million to get their tokens listed.
A $1 million listing charge is higher than the cost to list on most stock exchanges, the mainstream equivalent, and one ICO advisor told BI the charges were “too much.” The costs reflect the current power imbalance between exchanges and crypto projects.” – Business Insider
Because of this ‘Fake Volume’ it is fair to assume that some of these Cryptocurrencies are also acquiring ‘fake value’, an excellent article from Sylvain Ribes looks at the severity of this issue across a variety of exchanges and the effects it can have on the sustainability of an assets value. OKex seems to suffer most from what is know as Slippage.
Many pairs, albeit boasting up to $5 million volumes, would cost you more than 10% in slippage, should you want to liquidate a mere $50k in assets. Those pairs included, at the time of the data parsing (06/03/18): NEO/BTC, IOTA/USD, QTUM/USD. Hardly illiquid or low-profile assets. – Medium
None of this is good and we should always assume we know just a fraction of fraud and deception that is played out in these markets, where there is money to be made – greedy people will always take advantage regardless of what the implications on anything or anyone else may be.
What do you think about this, we’d love to hear your thoughts in the comments section below