Fake trading volumes reports comes with a mixed feeling in the crypto sphere. A recent research report published by Bitwise Asset Management has taken a look into account data from 97 crypto exchanges to trace the sequence of trade volumes. The report detailed that most of the crypto exchange platforms were providing faked volume to the listing website – some 87% of them to be precise (Note that the report was focused on bitcoin only). The report was submitted to the United States Securities and Exchange Commission and it stated that almost 95 percent of volume on unregulated exchanges appears to be fake or non-economic in nature.
Using observable data from reputable exchanges like Coinbase and Kraken as a baseline, the report recorded traded volume against the number of exchange visitors, showing that 59 percent of reported volumes were more than 10 times higher than would be expected: “If each exchange averaged the volume per visit of CoinbasePro, Gemini, Poloniex, Binance, and Kraken” tweeted TIE, “we would expect the real trading volume among the largest 100 exchanges to equal $2.1B per day. Currently that number is being reported as $15.9B.”
Changpeng Zhao, popularly known in the industry as CZ, said that the reports — most recently from Bitwise Asset Management and The TIE— on exchanges widely faking volumes will end up making the whole industry more transparent. The said research report has claimed that 87% of reported cryptocurrency exchange daily trading volume could be fake.
As contained in the TIE tweets “We started by pulling a list of the top 100 exchanges by reported trading volume over the last 30 days.We then used Similar Web website viewership metrics to calculate the estimated 30 day traffic to each exchange’s website. After doing this, we divided reported volume for each exchange by the # of monthly website visits to determine the reported volume per visit.”
However, CZ has added that contrary to the belief that CoinMarketCap is not to blame, the popular listing website had absolutely nothing to do with the situation:
“It’s not so much Coinmarketcap’s fault, everyone tried to blame on them [sic]. But CoinMarketCap has a very simple reporting mechanism where every exchange reports their own data to them, and they just show it.”
CZ made it clear that Binance will not be lured into starting a Twitter war with CoinMarketCap which he said was “kind of childish.” However, he said that the exchange is presently working with CoinMarketCap to find a solution to the problem. He equally said that delisting an exchange found faking volumes could serve as punishment and in turn contribute to mitigating the issue.
Digital Assets Exchange Luno Launches Cryptocurrency Literacy Tour For Varsities in Nigeria
Luno has kicked off its cryptocurrency adoption program for Nigerian universities dubbed “Cryptocurrency Literacy Tour for Universities” launching out with the University of Lagos as the first of a series of tour where it will go about canvassing for the favourable adoption of cryptocurrency through knowledge in 6 Nigerian universities.
Luno, an exchange based off of South Africa was launched in 2013. It has since continued its growth trajectory by adding new users across 40 countries spanning more than 4 continents. It presently boasts of up to 3 million registered users across its platform with Nigeria as one of its biggest market.
Speaking on this development, Owenize Odia, the Country Manager for Luno said:
We are committed to educating our customers given the nature of the market and the tendency for people to fall into the wrong hands while online
With its debut tour kicking off in Unilag and having 300 youths in attendance, Luno is clearly taking the charge to bringing about perceptual shift and a favorable disposition towards cryptocurrencies which it says has not been properly understood. Through its representative Odia, it argues that the current financial systems was built for a non-digital age, ignoring the needs of the modern individual. Citing on the decentralized nature of a peer to peer digital currency like the bitcoin, it is not dependent on any central government or authority as obtainable with fiat.
She continued by saying
We are contributing by investing heavily into our Luno Learning Portal, which helps the public, the media, and other stakeholders educate themselves about the facts, opportunities, and risks in the cryptocurrency market,
In her post on LinkedIn, Odia assured the participants and other stakeholders that Luno would continue to focus on awareness initiatives such as this in Nigeria and Africa at large, thereby providing a reliable platform where just about anyone can visit either buy or sell cryptocurrencies.
Cryptopia Capitulates, Appoints Grant Thornton as Liquidator.
New Zealand based Cryptocurrency Exchange which was hacked in January 2019 Cryptopia capitulates, appoints Grant Thornton as Liquidator in its move to start settling affected platform users.
This decision was reached according to the liquidator’s press release that the management after efforts were made in an attempt to return the exchange to profitability which proved unsuccessful and as such it became the interest of all stakeholders to liquidate the Company.
Liquidator David Ruscoe was quote saying,
We realize Cryptopia customers will want to have this matter resolved as soon as possible. We will conduct a thorough investigation, working with several different stakeholders including management and shareholders, to find the solution that is in the best interests of customers and stakeholders,
According to the Liquidator, the process is expected to span into months due to the complexity of the situation.
However, they (Liquidators) are focused on securing the assets of all stakeholders for their benefits and as such during this period, exchange activities will be suspended.
They further went on to say they are working with relevant authorities and independent experts as it concerns the exchange’s legal obligations.
In spite of this, as the news reached CryptoTwitter, the news of the liquidation has met a combination of pity, sadness and vexation of users of the Exchange with one saying and comparing Cryptopia to Binance
Grant Thornton, cryptopia team, I thought you would be smart and use profits from the coming months to buy back and refund costumers, I’m still waiting also for my Ormeus swap tokens. In scary territory you guys are moving. Look how @cz_binance is handling theirs.
— Justus Radegast (@JustusRadegast) May 15, 2019
Another user felt he has been cheated and commented thus
So they give a partly possibility to withdraw funds, almost reopen exchange to show police that they are ok and them just start liquidation. I am far from NZ, but I will fight for my funds
— DOH (@Donarito) May 15, 2019
Before its hack, Cryptopia was home to a large number of listed tokens and coins which attracted many Cryptocurrency Traders.
Despite the clamour for ultra-high security in exchanges and the call for users to hold their digital assets themselves on their private key held wallets, users still hold their assets on exchanges which are a prime target for hackers.
Recently on the 7th of May, Binance was hacked and it suffered a substantial loss of about 7000 BTC worth about $40m as at that date. Though it was a dent on the whole industry, the exchange reported it will indemnify all loss via its SAFU Fund.
The comparison of Cryptopia to Binance speaks volume of the nature of the industry. It’s better to exchange assets on an exchange that has insurance than those which doesn’t.
It’s also better to be outrightly transparent as Cryptopia was in liquidating the firm and settling stakeholders.
However, the question that must be answered is, will the small guy in a remote village of a third world country with assets on the exchange valued at about $50 or less receive indemnification? If yes, to what extent?
To answer this, let’s wait months to see or worse, years as is the case with Mt. Gox.
Binance Gets Hacked of 7000 BTC
Looks like CZ Would Have to Take Solace via the Liverpool Invite Afterall
Binance has been hacked after several unsuccessful attempts by hackers for a period of one year now as issued in its press release. With this hack, perpetrators successfully carted away with 7000 BTC in a single transaction. The damage could be more in the coming days CZ opines, as the team is taking time to investigate how deep this damage could be.
Binance announced itself to the world and without any doubt becoming the exchange trading platform of choice for most traders in the space. And swiftly, displacing veterans in the space such as Bittrex, Poloniex etc, for top positions, little doubt was left in the minds of many as to the height Binance could attain within the space as the cryptocurrency adoption continues to gain traction globally.
While Binance was making a good name for itself with the mantra “Exchange the world”, hackers were also making plans to ink their activities in the books of history as one of the successful clandestine groups who have successfully carried out a heist on the most popular exchange. February 2018, saw hackers attempt to breach the exchange security systems which was botched as they unsuccessfully got hacked themselves. It was in the news how the hackers themselves got hacked. After successfully targeting and breaching several user accounts via API (Application Programming Interface), the hackers pumped a VIA/BTC pair by over 10,000% and then immediately sought to cash out by withdrawal. This attempt was botched as the risk management mechanism built in triggered an alarm that automatically froze withdrawal leaving the hackers funds trapped in the exchange.
With controversial entities like McAfee tweeting that Binance exchange has been hacked, Binance quickly attacked him on Twitter that he’s trying to create FUD (Fear, Uncertainty and Doubts).
— Binance (@binance) February 8, 2018
Responding after some months, McAfee apologized to CZ and the entire Binance Team that he obviously was wrong and CZ offering a cup of coffee when they meet someday, could there be no love lost between the duo?
One thing was clear, CZ shared with his fans how this event obviously was a blessing in disguise and had made his fanbase grow very quickly. This marked a new era for both the Binance Team and their maverick CEO. CZ was always in the news whether for bagging new partnerships, fostering industry growth or even for recent CZ vs BSV Craig Wright Binance delisting.
From yesterday’s hack, and as described by Binance in their press release, it sure looks like the hackers decided to stage a “hackathon” on Binance. The recent hack operation was well coordinated. Took time and patience to execute. Even Binance agreed the modus operandi of these hackers followed the “once beaten, twice shy” route. They were not going to be hasty allowing their funds get trapped again. Alas! They got through with the similar pattern in the past but this time more intelligently.
Apparently CZ had tweeted that #SAFU (Secured Asset Funds for Users) funds will be used to ensure everything is kept under control while the team investigate and try to do implement damage control. Industry Leader and TRON CEO, Justin Sun has offered open support for Binance offering to transferring 7000 BTC to the Binance wallet and buying BNB and USDT to help stabilize the situation.
— Justin Sun (@justinsuntron) May 8, 2019
One particularly interesting part of the AMA session held few hours after the unfortunate hack incident is that CZ and his teams are putting all options on the table in ensuring this issue is salvaged. One of such is a reorganization of the bitcoin blockchain network. This is already sparking heavy debate across social media. This option even though earlier considered has been dropped as outlined in his tweet.
Received an invitation from Liverpool, very cool! pic.twitter.com/znBzg7b9Mn
— CZ Binance (@cz_binance) April 27, 2019
Let’s not be quick to forget at that nicely designed parcel CZ unveiled on Twitter sent to him by Liverpool FC, looks like this is actually a great time for CZ to honour that Liverpool invite he brandished via his Twitter account considering how exciting the club is right now after the 4 – 0 thumping of Barcelona at Anfield last night in the UEFA Champions League Semi Finals clash.
Bitcoin Trading at $6000, Ether at $173 at Bitfinex.
An Opportunity for Arbitrage Hunters?
Bitcoin trading at $6000 on Bitfinex presents arbitrage opportunities for traders at a market volume of $38.9 million in Bitfinex. This is $300 over the reported price in Coinmarketcap as at Press time presenting arbitrage opportunities to traders.
Ether the second top cryptocurrency by market capitalization is trading at $173 as against the reported aggregate in CMC of $164. This is an interesting opportunity for arbitrage seekers. Sure appearing like a great opportunity considering some of the major top cryptocurrencies are experiencing some significant value increase in the exchange. This is evidenced with the variance as seen with other exchanges or the CMC reported aggregated data.
Bitfinex which was founded in 2012 and has its headquarters in Hong Kong is currently listed as the 44th top cryptocurrency exchange. This is according to Coinmarketcap data as at press time. It was one of the top and biggest exchanges, prior to the launch of some of the exchanges ahead of it. However, it has been beset by a wide variety of allegations many of which it has up until now not been able to provide acceptable and substantial evidence to refute.
Arbitrage is a unique opportunity for traders to enjoy unique profits by trading the price differences between two different exchanges. According to Coinmarketcap and Bitfinex price data on Bitcoin and Ethereum, traders can be able to enjoy up to $300 and $10 profits respectively with Bitcoin trading at $6000 on Bitfinex presenting arbitrage opportunities.
Even more, Bitfinex has recently announced the launch of their IEO in their attempt to raise $1 billion to continue financing its operation. This is expected to happen in the midst of its varied scandalous allegations such as wash trading, Tether’s full value not hedged against the Dollar, inability to provide clarity of Tether’s operative transparency, Bitcoin manipulation.
Bitfinex price data was removed from the data feed of Coinmarketcap yesterday with the sign of an asterisk * which the website says means
“Some prices are manually excluded from the average, denoted by an asterisk (*) on the markets tab. This action suggests price is not indicative of a “free market price”
Hence, its removal by CMC. This is coming after Coinmarketcap set new rules towards ensuring exchange transparency
Arbitrage provides a great opportunity for traders to make significant gains and profits. And as such, users are most likely to troop into the exchange. Be that as it may, many may not be considering the looming scandals and the rationality of the $1 billion funds to be raise via IEO.
Consequently, will anyone because of profit attempt getting into Bitfinex to enjoy Bitcoin trading at $6000 on Bitfinex presenting arbitrage opportunities? Let’s see how the arbitrage hunters react to this.
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