The crypto industry is currently going through such a crisis that the term “crypto winter” is already established. What is meant by this is that after years of bright growth, a gloomy, depressed atmosphere now prevails around the crypto topic.
The latest report is still a shovel on it. According to the “Sonntagszeitung”, researchers from the US, UK and China revealed serious results in a study published by the US National Bureau of Economic Research (NBER). Accordingly, 70 percent of all transactions on a total of 26 unregulated crypto exchanges were fraudulent.
Buyer and seller are the same
Specifically, these operations were washing operations. These are mostly non-existent, or rather bot-generated trading processes, where buyer and seller are the same actor. The purpose of this process is to artificially generate interest in a cryptocurrency through exchange-based trading. If there is a lot of trade, price increases can be expected.
This phenomenon is not even new. Last year, business magazine Forbes analyzed 150 cryptocurrency exchanges around the world and concluded that more than 50 percent of exchange transactions were open trades. However, as a result of the crypto boom, the issue has so far been swept under the rug.
This is fraud. This primarily happens on unregulated crypto exchanges. No such manipulations were seen in the three exchanges overseen by the financial authorities examined by the research team. However, only a small fraction of all transactions go through regulated exchanges like Coinbase or Bitstamp. Therefore, a significant portion of the reported crypto trading volume is likely to be fake.
Negative reports don’t stop
The NBER report joins the ever-growing list of negative crypto reports. The collapse of crypto exchange FTX and the lawsuit against its founder, Sam Bankman-Fried, brought potential fraud in the crypto world to public attention for the first time. Meanwhile, prominent Winklevoss twins have also been sued for fraud with crypto exchange Gemini. And on Wednesday, cryptocurrency exchange Coinbase accepted a $50 million fine for failing to take anti-money laundering measures.
Jean-Claude Raemy
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
