Bitwise Report to SEC Shows Transparency a Problem with Crypto Exchanges

written by

Support free journalists: > send a tip

A comprehensive Bitwise report that was submitted to the US Securities and Exchange Commission (SEC) that put the issue of fake volumes on crypto exchanges under the spotlight also provided a sound and clear answer on the true issue: a lack of transparency on crypto exchanges.

The complex relationships between token issuers or project owners and crypto exchanges, not to mention the data aggregation sites that look at market capitalization and trading volumes show that any data produced is difficult to verify and therefore, makes it very dubious for investors who already have a hard time dealing with the asset’s volatility.

A Forbes article points out that this three-party relationship’s worst and most noticeable repercussion is the “absurd volumes” on a majority of crypto exchanges.

It is worth noting that the Bitwise report was in fact only a comment to the SEC, in which it cited the “dramatic improvements” in the Bitcoin spot market and arbitrage strength, although also stressed that 95% of exchange volume was likely falsified due to wash trading.

Other reports have also echoed these findings, such as The Block‘s analysis that although showed a lower percentage (86%) was still a significant damning of crypto exchanges. Even the world’s leading crypto exchange, Binance, despite its claims of being clean and accusing others of wash trading, has been found to be equally guilty.

So even though the positive takeaway was that Bitcoin’s efficiency in the spot market was better than generally expected, the huge problem was that of the lack of transparency among most crypto exchanges.

The report scraped live trading data from 83 exchanges and 73 failed at least one of their tests for real trading volume, reporting this as “10.5 billion dollars out of the 11 billion dollars in reported daily volume (or – 95%) is either fake or wash trading”.

 

BitcoinNews is committed to unbiased news and upholding journalistic codes of ethics. For more information please read our Editorial Policy here.

Follow BitcoinNews on Twitter: @BitcoinNewsCom
Telegram Alerts from BitcoinNews: https://t.me/bconews

Image Courtesy: Pixabay

Help spread this article :)

BitcoinNews.com is NOT INVESTMENT ADVICE

Opinions expressed are entirely their own and do not necessarily reflect those of BitcoinNews.com

For informational purposes only. Individuals and entities should not construe any information on this site as investment, financial, legal, tax, accounting or other advice. Information provided does not constitute a recommendation or endorsement by BitcoinNews.com to buy or sell bitcoin, cryptocurrencies or other financial instruments. Forecasts are inherently limited and cannot be relied upon. Do your own research and consult a professional advisor. The opinion of authors do not reflect those of BitcoinNews.com 

   Advertisement

Latest on Bitcoin News

   Advertisement