Citizen Sleuth Alleges Fake Volume on OKEx Cryptocurrency Exchange

Citizen Sleuth Alleges Fake Volume on OKEx Cryptocurrency Exchange

Per CoinMarketCap, Chinese cryptocurrency exchange OKEx handles a ton of trading volume as of late. Yet one researcher’s been doing some digging, and they think the data just isn’t adding up. 

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Somewhere in the gray between napkin math and preliminary investigatory research, Medium commentator and former professional poker player Sylvain ‘ArtPlay’ Ribes wrote a March 10th column entitled “Chasing fake volume: a crypto-plague.” In it, the writer alleges that many Chinese exchanges are faking large amounts of trading volume — most notably OKEx, the self-described “Most Trusted Digital Asset Exchange.”

Ribes starts out his post by mentioning he didn’t start his research looking for fake volume; but after mining through some data points and finding some unusual discrepancies between exchanges, he began zeroing in on the variable.

“A bit of wash trading and artificial volume inflation is to be expected in a thoroughly unregulated market,” Ribes wrote. “What I did not expect was the magnitude of the fraud.”

The ensuing argument that’s made is a bit technical for the average reader, but some of the charts that Ribes presents speak for themselves as far as the questions that are raised. For example, consider the absurd uniformity of the volume in this OKEx LTC/BTC chart:

Cryptocurrency
The most formulaic volume you’ve ever seen.

Ribes contrasts this impossibly consistent volume pattern with an LTC/BTC chart from cryptocurrency exchange Poloniex:

The volume here has no clear pattern in contrast.

Ribes’ Conclusion

With some further data crunching, Ribes’ notably argues that “about 92.9% of all OKEx’s volume is most likely fabricated.”

The writer goes on to say that under similar examination the cryptocurrency exchange Huobi seems to exhibit “81.8 percent of made-up volume.” In fact, Ribes goes on to say that many China-linked exchanges, including “Lbank, Exx, RightBTC, CoinEgg, Zb, BitZ, Bibox, CoinEx,” all apparently exhibit considerable amounts of fake volume.

The researcher calls the phenomenon “The Chinese rip-offs armada” and recommends market trackers like CoinMarketCap should address the alleged fraud:

“It is an absolute disgrace that CoinMarketCap and LiveCoinWatch should list these scamholes alongside sometimes struggling legit exchanges.”

OKEx is innocent until decisively proven guilty, of course. But, in the very least, Ribes’ column does raise important questions.

What’s your take? Do you think fake trade volume, if found to be true, is bad for everyone in the cryptoverse? Sound off in the comments below. 


Images via Sylvain Ribes, Law Enforcement Cyber Center

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