Chinese regulator accuses crypto exchanges of fraudulent volumes


The National Internet Finance Association of China (NIFA) warned investors that cryptocurrency exchanges outside the country are committing manipulative practices on April 2.

The People’s Bank of China (PBoC) -related regulator warned investors that many off-shore exchanges trade to falsify trading volume and use outdated tactics to liquidate leveraged traders.

NIFA cites an internal analysis of cryptocurrency markets that found that more than 40 crypto assets were producing trading volumes that accounted for more than 100% of their total market capitalization, while another 70 cryptocurrencies saw daily trading activity equal to more than 50% of their market capitalization.

The regulator states that he has identified “huge trading volumes” for many crypto assets, despite many markets displaying “relatively low price and small market values”.

NIFA accuses crypto exchanges of both messing with volume data and running bots to wash the trade in an attempt to create the illusion of ‘false prosperity’.

Furthermore, NIFA accuses exchanges of deliberately shutting down their systems or shutting down malfunctions to lock up and liquidate leverage traders during times of peak volatility:

“After misleading investors to invest in crypto, some exchanges will manipulate the market through a range of trading techniques to take the investors’ assets.”

The regulator states that many of the stock exchanges have fled the coast after the PBoC’s crackdown on crypto exchanges in 2017.

NIFA argues that the exchanges circumvent authorities by regularly changing domain names and server addresses of websites and by using a combination of online and offline transactions to cover up capital flows.

Binance was one of the exchanges that left China in 2017. In November 2019, rumors circulated that Binance would like to open an office in China.

In March, Binance Academy launched a blockchain research institute in Shanghai, which includes the creation of Binance’s first operational base in China in over two years.

In January, Binance Charity pledged to purchase $ 1.4 million in medical supplies to be donated to more than 300 hospitals and medical organizations in Chinese provinces at the epicenter of the COVID-19 pandemic – likely to generate goodwill from the plant government.

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