Wash trading at cryptocurrency exchanges

Guénolé Le Pennec, Ingo Fiedler and Lennart Ante

Finance Research Letters, 2021, vol. 43, issue C

Abstract: Cryptocurrency exchanges allegedly use wash trading to falsely signal their liquidity. We monitored twelve exchanges for metrics of web traffic and for their administered user funds. The exchanges were clustered in three distinct groups based on previous findings: (1) accurately-reporting exchanges, (2) exchanges that engaged in wash trading, (3) exchanges with mixed evidence of wash trading. A comparison of the reported to the predicted trading volume, calibrated on the accurately-reporting exchanges, suggests that group 2 exchanges exaggerate their true volume by a factor of 25 to 50, and exchanges of group 3 by a factor of 1.25 to 33.

Keywords: Bitcoin; Ethereum; Blockchain; Trading volume; Fake volume; Market manipulation (search for similar items in EconPapers)
JEL-codes: G20 G24 G28 (search for similar items in EconPapers)
Date: 2021
References: View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:43:y:2021:i:c:s1544612321000635

DOI: 10.1016/j.frl.2021.101982

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