Cryptocurrency exchanges now and again are accused of using manipulative practices, including falsification of trading volumes. The last in sight of vigilant community members was the South Korean Bithumb trading floor, although in this case it is not necessarily about deliberate actions on the part of the company itself.
In a series of tweets, the Argentine trader, economist and analyst Alex Kruger, told us that $250 million in Bithumb trading volume is probably due to “cleaning” deals, which occur every day at exactly 11 am on Korean time.
Kruger said that he is watching the activity on the stock exchange since August 25. He explains that Bithumb offers 120% compensation to commissions paid by traders, with a daily limit of 1 billion Korean won ($900,000) during the advertising campaign. Thus, Kruger assumes that a trader with sufficient resources to take advantage of this opportunity places two opposite bids daily, paying a commission of 0.15% on each of them and receiving a 0.36% payment from both applications. According to the analyst, for this operation he needs 278 billion Korean won or $250 million.
Last week, it became known that the volumes of Bithumb trades began to recover after they fell against the backdrop of the termination of the bank contract, which in turn was related to the June cracking of the platform.
“Notice how each day deals are made for 31,000 bitcoins (252 billion KRW) at exactly 11:00 am. The remaining $26 billion fall on other coins,”Kruger writes under the schedule, adding that the sudden increase in the volume of trading in this case should not be taken as a bullish signal.
Exchange Bithumb associated with suspicious trading activity is not the first time. In December of last year, traders reported that they could not sell XRP cheaper than 2,242 won ($2,100,754), since all orders for sale of 2,241 won ($2,099,817) or lower were canceled by the trading platform itself, due to which, according to some assumptions, artificially maintained the overvalued rate of the cryptocurrency.