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Wash Trading Bitcoin

Wash Trading

Wash Trading

Wash trading refers to buying shares through one broker and selling the shares through another broker. Wash trading is not legal, as it is performed to manipulate the market and encourage other investors to move into a buying position. A quick turnaround of positions is not considered wash trading, provided the transaction creates market risk for the trader and alters his market position. Also known as round trip trading, the act of wash trading allows traders to buy stocks and then sell them, giving the appearance of purchases and sales being made, but the trader does not incur any market risk or change in market position. The Commodity Exchange Act (CEA) establishes regulations for the trading of commodity futures in the United States. Under the CEA, wash trading is illegal. The CEA was passed in 1936 and has been amended a number of times since its establishment. It replaced the Grain Futures Act of 1922 . This Act provides the statutory framework under which the Commodity Futures Trading Commission (CFTC) operates. The CFTC was created in 1974 as a result of the CEA. A wash sale is completely separate from wash trading. A wash sale is the sale of a security, such as stocks or bonds, at a loss. The same, or nearly the same, security is then repurchased quickly, within 30 days, either before or after the sale. Wash sales are used as collateral for margin debt ; they must be approved by the Federal Reserve Bank . In addition to a trader buying back the same security within the 30-day period, a wash sale is also approved if the trader acquires an identical security in a taxable trade or acquires an option or contract to buy the same security that was sold. Regulations surrounding wash sales are designed to protect an investor who carries an underlying loss and then wan Continue reading >>

A Stark Warning Emerges About Bitfinex And Wash Trading

A Stark Warning Emerges About Bitfinex And Wash Trading

A Stark Warning Emerges About Bitfinex and Wash Trading Even though wash trading is illegal, Bitfinex continues to conduct it as a part of its operations, according to BitCryptoed , who has dedicated his time to exposing malpractice at Bitfinex. A two-part blog post outlines the suspected misconduct. The first part explains what happens and how the exchange benefits, with the second part touching on the reasons behind it. Market manipulation increases with the surging volume of cryptocurrency market. The fact cannot be avoided that fraud continues to rise along with security measures. Before proceeding, let us clear up the term wash trading. Wash trading refers to a situation where an investor buys a share/any financial instrument from a broker and sells it via another broker. This type of trading constitutes market manipulation and is not legal. Investors under wash trading buy & sell their own entity without incurring any market risk and also with the existence of such sales and purchases. According to the Commodity Exchange Act, wash trading is illegal but the bitcoin exchange Bitfinex allows it. Here is how: Order to buy/sell bitcoin or any currency Bitfinex supports trading for, Opt an order that exactly match your earlier order, At last, trading will be executed against your own order. However, if there was no wash trading, then a system of such exchange must update that your own orders are not identical. It is evident that wash trading leads for the unexpected market manipulation that is the reason other exchange platforms are not permitting it for their operations. BitCryptoed also provides some video evidence that shows what the most obvious form of wash trading looks like. An Intentional Feature of Bitfinexs Trading Engine? There is a lot of debate around cer Continue reading >>

Wash Trading Bitcoin: How Bitfinex Benefits From Fraudulent Trading

Wash Trading Bitcoin: How Bitfinex Benefits From Fraudulent Trading

Blog for @Bitfinexed on Twitter. Exposing fraud by largest Bitcoin exchange, Bitfinex/Tether Wash Trading Bitcoin: How Bitfinex benefits from fraudulent trading Wash trading is an epidemic in the Bitcoin markets. For those that are not aware, a wash trade is where a person buys and sells to their own order. For a more in depth explanation, see here . From my very first post Ive been warning about people wash trading. Originally I presumed that wash trading was being performed by two accounts controlled by the same entity. However, Ive been informed by reliable sources, and confirmation, that this is in fact, even easier than I thought. New information was provided to me from some traders, and in my honest opinion only causes me to believe that this is even more likely a criminal operation. I originally presumed it was two accounts because, no way in the world would Bitfinex allow trades between the same account. That would just be stupid of epic proportions Update: October 22nd, 2017. Bitfinex has officially responded to these allegations. Bitfinex employee Andrew regularly acts as PR for Bitfinex on Reddit. Source ( Archive ) The dirty secret about Bitfinexs tradeengine I want you to think of a company building an airplane. This company is going to acquire the resources, build the wings, cockpit, fuselage, tail, the engines, windows, doors, life support systems, and so on I want you to think of Bitfinex building a plane just like that. They have what appears from the outside to be a real airplane, wings, tail, fuselage, etc. To the untrained eye everything looks normal. Its definitely a plane. Now imagine if this plane did not have a fuel tank, and they sold this airplane to someone, knowing it had no fuel tank. No plane manufacturer in the world would make a mistake Continue reading >>

Only One Person Cause The Price Of Bitcoin To Jump From $150 To $1,000 In 2013

Only One Person Cause The Price Of Bitcoin To Jump From $150 To $1,000 In 2013

Only one person cause the Price of Bitcoin to Jump from $150 to $1,000 in 2013 Only one person cause the Price of Bitcoin to Jump from $150 to $1,000 in 2013 A recent report on Bitcoin price manipulation has shown that the massive surge in 2013 that saw price move from $150 to $1,000 may have been caused by just one actor. The report which was written by JT Hamrick, Tyler Moore, Tali Oberman and Neil Gandal looked at suspicious circumstances that took place on the bankrupt Mt. Gox exchange. The report says that its very related the price increase of the Bitcoin price in 2013. The USD-BTC exchange rate went up by an average of 4% during the days when suspicious trades took place. This is compared to a decline on the days when there were no suspicious activities. The activities mainly consisted of Markus and Willy and used Bitcoins that they did not own to perform transactions that resembled valid trades. The transactions were then included in the trading volume by MT. Gox exchange. They were made to boost trading in order to show higher than normal trading activity thus attracting the public to start trading. The report went on to say that the use of the Willy bot and its trade were used as a cover in the early stages after the hack on Mt. Gox: In a Reddit post after the hack it was stated that hackers had stolen a huge number of Bitcoins in 2011 but there was a cover-up by Mark Karpeles the owner of Mt. Gox for several years. Bitcoin crypto market is always susceptible to price manipulation because of the thin price market which leaves it very vulnerable to very high price changes. We had earlier reported that there is an actor who had been manipulating the price of Bitcoin by spoofing. The actor known as spoof has also been doing wash trading which is buying and selli Continue reading >>

Bitcoin Price Analysis: Wash Trading & Rising Volume

Bitcoin Price Analysis: Wash Trading & Rising Volume

Bitcoin Price Analysis: Wash Trading & Rising Volume In recent weeks there has been noticeably more volume on two of the major bitcoin exchanges: Bitstamp & OKcoin. The two charts below show the big increase in volume with very little price movement on both of these exchanges. In recent weeks there has been noticeably more volume on two of the major bitcoin exchanges: Bitstamp & OKcoin. The two charts below show the big increase in volume with very little price movement on both of these exchanges. After speaking with self proclaimed degenerate gambler and one of the most respected bitcoin traders of the space, BTCVIX, most of this volume appears to be wash trading. And now we are even seeing some of this interest wane as I believe the ramping up volume washing bot activity is the Casino trying to keep the lights flashing and the sounds blasting so that we keep wanting to play the game, according to BTCVIX. More can be found on this subject: This is done to fake liquidity and volume. What happens is large orders are bought and sold of almost the same amount very quickly. This increases churn but affects price very little. Below are some charts showing what is considered to be wash trading. Bitcoin has been stuck in a very tight range (under US$20) since the beginning of September. While this column has commented for months on the lack of volume on any upside moves and how disappointing that is, this type of volume increase can be a self fulfilling prophecy. Volume generally precedes price and while it is only one factor, there are reasons to be bullish here. As the above chart shows, the price has broke above the 50 day EMA, which could set up for a move to test big resistance in the US$255-$260 range. Not only that but the Bollinger Bands and the Directional Movement I Continue reading >>

Bitcoin Tax Guide: Trading Gains And Losses - Wash Sales: Impossible To Track?

Bitcoin Tax Guide: Trading Gains And Losses - Wash Sales: Impossible To Track?

Bitcoin Tax Guide: Trading Gains And Losses - Wash Sales: Impossible To Track? Bitcoin Tax Guide: Lost Or Stolen Bitcoins As if the bitcoin tax situation werent complex enough, theres at least one more interesting feature of digital currencies because of their status as property. This is the concept of wash sales , situations in which a taxpayer sells off an investment, realizing a tax loss, and then immediately buys it back at a bargain price. Wash sales typically apply to stocks and securities, o its unclear exactly how it will impact bitcoin and other digital currency traders in the years to come. Because bitcoin is not considered a stock or security, the IRS would likely only go after investors for non-economic substance transactions which cover broader property rules. The fact is, most traders make investment decisions in bitcoin and other digital currencies because of market-moving news and based on the wide swings in price levels of these currencies, not for tax purposes. Because of that, it is unlikely that bitcoin traders would be penalized by the U.S. government under these rules. Should the IRS eventually close off the wash sales loophole, which would potentially have implications for a bitcoin investor. He or she would need to wait at least 30 days before buying more bitcoins in order to realize a loss on another sale of his holdings. Depending upon the exchange and the wallet that our sample investor makes use of, the IRS will probably be able to catch him if he tries to claim improper losses on wash sales. More likely, though, and given the global, decentralized nature of digital currencies and their exchanges, it would be very difficult for the IRS to flag him for under-reporting on wash sales. This doesnt even take into account cold storage, referring t Continue reading >>

U.s. Regulator Sanctions Bitcoin Trading Platform Over Wash Trades

U.s. Regulator Sanctions Bitcoin Trading Platform Over Wash Trades

September 24, 2015 / 5:15 PM / 3 years ago U.S. regulator sanctions bitcoin trading platform over wash trades WASHINGTON (Reuters) - A New Jersey-based bitcoin swap trading platform was sanctioned by U.S. derivatives regulators on Thursday after it allegedly facilitated illegal wash trades and then misled U.S. regulators both through press releases and at a government-sponsored public meeting. The Commodity Futures Trading Commission said TerraExchange LLC pre-arranged the sale of a swap that derived its value from bitcoins for trading last October, in an effort to test its systems. There were only two buyers authorized to trade it, and they each bought the swap for the same size and amount, effectively offsetting each other in what is known as an illegal wash trade. Later, however, the trading platform attended a CFTC advisory committee meeting where it announced the trade was evidence of actual market interest, without disclosing the trade was pre-arranged. Reporting by Sarah N. Lynch; Editing by Eric Walsh Continue reading >>

Bitcoin 'nuts' Will Hold Cryptocurrency Until Price Plummets To Zero - Dr Doom Nouriel Roubini

Bitcoin 'nuts' Will Hold Cryptocurrency Until Price Plummets To Zero - Dr Doom Nouriel Roubini

Nouriel Roubini (@Nouriel) February 6, 2018 Pointing to bitcoins slide, the economist posed the question on Twitter whether authorities like the US Securities and Exchange Commission (SEC) wouldstart looking into these criminal activities? He used the term HODL, which stands for hold on for dear life and originated in an online forum when someone spelled the word "hold" wrong. HODL has become a meme that is often used in times of extreme volatility in the cryptocurrency market for people holding rather than selling. Roubini said that"HODL nuts"will hold bitcoin until it plummets to zero. In November, Dr Doom warned that the cryptocurrency will become so regulated that it wouldfind its end. As Bitcoin crashes to a $5K handle the wash traders move rapidly into action to prop it up...price and quantity action now clearly consistent with criminal wash trades...will the SEC and CFTC start looking into these criminal activities? Nouriel Roubini (@Nouriel) February 6, 2018 In my opinion, there is a gigantic speculative bubble related to bitcoin because this is neither a serious method of payment nor a good way to store capital,he said.Bitcoin feeds on itselfand there are no fundamental reasons for its price to reach such levels, Roubini explained. Since hitting $20,000 six weeks ago, bitcoin has lost more than two-thirds of its value, plunging to $6,000 on Tuesday. Other major digital currencies are also well off their all-time highs. For more stories on economy & finance visit RT's business section Continue reading >>

Bitcoins And The Blockchain: The Cftc Takes Notice Of Virtual Currencies

Bitcoins And The Blockchain: The Cftc Takes Notice Of Virtual Currencies

Bitcoins and the Blockchain: The CFTC Takes Notice of Virtual Currencies Bitcoins and the Blockchain: The CFTC Takes Notice of Virtual Currencies Mark D. Young Maureen A. Donley Theodore M. Kneller Gary A. Rubin As interest in bitcoin derivatives has increased, the Commodity Futures Trading Commission (CFTC) has turned more of its attention toward virtual currencies. For a little more than a year, at least two trading facilities registered with the CFTC have offered bitcoin derivatives for trading in the United States. Another company plans to offer bitcoin derivatives on its platform and applied in 2014 to register a derivatives clearinghouse for bitcoin derivatives. More recently, the CFTC brought two enforcement actions related to bitcoin derivatives. In In re Coinflip, Inc., it asserted jurisdiction over bitcoin-based derivatives contracts and shut down an unregistered facility offering bitcoin options; in In re TeraExchange, LLC, the CFTC issued a cease-and-desist order to a registered swap market called a SEF, for swap execution facility, after finding that the SEF publicly claimed certain bitcoin trades represented actual market liquidity when the trades were in fact prearranged wash trades. The CFTC also has taken notice of an innovative ledger system known as the blockchain, which verifies and records all bitcoin transactions. In speeches in late 2015, CFTC Chairman Timothy G. Massad and Commissioner J. Christopher Giancarlo each commented on the potential impact of blockchain technology on financial ecosystems. The blockchains impact on derivatives markets was a topic at a CFTC advisory committee meeting, which included a discussion of smart futures contracts. As Commissioner Giancarlo observed, there are numerous potential innovations that may be possible wi Continue reading >>

Mysterious Trader With

Mysterious Trader With "nearly Unlimited Bankroll" Said To Manipulate, Dominate Price Of Bitcoin

Mysterious Trader With "Nearly Unlimited Bankroll" Said To Manipulate, Dominate Price Of Bitcoin It was over three years ago, back in May 2014, when we wrote " How Bots Manipulated The Price Of Bitcoin Through "Massive Fraudulent Trading Activity" At MtGox " in which we first demonstrated one of the more striking observed "bot-driven" bitcoin manipulation schemes, in this case related to the infamous collapse of the now defunct Mt.Gox bitcoin exchnage. As we wrote at the time, a number of traders began noticing suspicious behavior on Mt. Gox. Basically, a random number between 10 and 20 bitcoin would be bought every 5-10 minutes, non-stop, for at least a month on end until the end of January, by what appeared to be two algos, named later as "Willy" and "Markis." Each time, (1) an account was created, (2) the account spent some very exact amount of USD to market-buy coins ($2.5mm was most common), (3) a new account was created very shortly after. Repeat. In total, a staggering ~$112 million was spent to buy close to 270,000 BTC the bulk of which was bought in November. "So if you were wondering how Bitcoin suddenly appreciated in value by a factor of 10 within the span of one month, well, this is why. Not Chinese investors, not the Silkroad bust these events may have contributed, but they certainly were not the main reason. But who did it? and why?" Of course, in the end this alleged manipulation did not help Mt.Gox which eventually collapsed in what has been the biggest case of cryptocoin fraud in history. We bring up this particular blast from the past, because in the latest case of bitcoin market abuse - with Bitcoin trading at all time highs above $3,000 - Cointelegraph reports of rumors swirling about a trader "with nearly unlimited funds who is manipulating the Bi Continue reading >>

Bitcoin Belongs More To The Realm Of Fraud Than Finance Or Economics Analyst

Bitcoin Belongs More To The Realm Of Fraud Than Finance Or Economics Analyst

Bitcoin 'nuts' will hold cryptocurrency until price plummets to zero - Dr Doom Nouriel Roubini Bruno compares bitcoin to Monopoly money, which can be minted by private individuals. Its something akin to the New Testament, when Jesus multiplied the loaves of bread and the fish. According to the analyst, bitcoin is a bubble at best and Ponzi scheme at worst. Bruno says cryptocurrencies backed by gold or other assets can be a comfortable tool to invest in commodities, precious metals, etc., while bitcoin is backed by nothing. Bruno predicts that the price of bitcoin will fall, as regulators and banks around the world take a harsher stance on cryptocurrencies. Nouriel Roubini, famous for predicting the 2008 financial crisis, expects to increase the value of zero dollars. He warns that the US Congress hearings that will see Christopher Giancarlo, president of the Commodity Futures Trading Commission (CFTC), and Jay Clayton, president of the Securities and Exchange Commission (SEC), the two main financial market authorities testify on cryptocurrencies. That could set off more warnings. Cryptocurrencies have fallen dramatically over the last few weeks amid tighter regulation and government crackdowns and the ongoing US investigation on market manipulation. You may have noted that bitcoins dropped to $6,000 on Monday, Jan. 6. They recovered on Wednesday, but be careful. That, says Roubini, might be a manipulation tactic called wash trading to support the price of bitcoin. Wash trading occurs when someone who buys and sells a bitcoin, or a stock or any other asset to manipulate the markets, says Bruno. The blockchain technology behind bitcoin is here to stay, when bitcoin and what will remain after bitcoin is reduced to bits of dust. For more stories on economy & finance visit Continue reading >>

Study Finds $3b Worth Of Faked Cryptocurrency Volumes And Wash Trades

Study Finds $3b Worth Of Faked Cryptocurrency Volumes And Wash Trades

Study Finds $3B Worth of Faked Cryptocurrency Volumes and Wash Trades On March 10 a cryptocurrency trader and researcher published a report on how he believes $3 billion worth of cryptocurrency trade volumes, primarily from a couple of exchanges, are concocted. The author of the study, Sylvain Ribes, alleges that the exchange Okcoin has been fabricating up to 93 percent of its trade volumes. Also read: Thailand Dodges Extreme Cryptocurrency Regulations Sylvain Ribes has published a study that reveals some interesting information about trade volumes stemming from exchanges like Okcoin (Okex) and Huobi, which may be falsifying their trade volumes. Ribes calculated his data from order books across all major exchanges to measure how badly market selling $50k USD worth of each cryptocurrency would crash the price. Further Ribes refers to a term called slippage, which he defines as the percentage change between the observed mid-spread price and the lowest price I had to consent to sell the asset. Throughout Ribes research of various currency volumes coming from exchanges like GDAX, Bitfinex, Kraken, Binance and more he found vast inconsistencies between trading platforms. I found ridiculously massive discrepancies between exchanges. Not the kind that can be easily hand-waved away (oh well, their users must behave differently), but the kind that can only be explained by some figures being overstated as much as 95%, explains Ribes study. Leading the pack is Okex, currently ranked #1 exchange by volume with $1.7b total volume on both Coinmarketcap and Livecoinwatch websites. Orange, dark blue and light blue dots are GDAX, Bitfinex,and Kraken. Red dots are Okex. The exchange Okex is a ghosttown says Ribes. A Suffocating Majority of Okex Volume Is Fake Okex volumes raised a red f Continue reading >>

Wash Trading Bitcoin Part Ii: Who And Why Is Someone Wash Trading On Bitfinex?

Wash Trading Bitcoin Part Ii: Who And Why Is Someone Wash Trading On Bitfinex?

Blog for @Bitfinexed on Twitter. Exposing fraud by largest Bitcoin exchange, Bitfinex/Tether Wash Trading Bitcoin Part II: Who and why is someone wash trading on Bitfinex? If you have not read my previous article, I have well established that wash trading is allowed by Bitfinexs trade engine and you should read that article before this one. Wash trading is an epidemic in the Bitcoin markets. For those that are not aware, a wash trade is where a person buysmedium.com Some people have asked me what is the point of wash trading on Bitfinex? People generally like to point out that in order to wash trade on Bitfinex, theyd still have to pay a fee. First, I know of at least one instance where it appears that a wash trade was not charged a fee for a trade. Second, even if a fee is charged, that doesnt mean a wash trader paying fees is really paying fees. If youre a shareholder in Bitfinex, youre allegedly paid dividends. These dividends come from fees. If youre wash trading massive amounts of Bitcoin on Bitfinex as one of these shareholders you basically get some of those fees back. If people decide to trade on Bitfinex because they see the high volumes and assume theres liquidity, you would net-profit from shilling trade volume on the exchange when they come to play. The volumes on Bitfinex will make Bitfinex appear to be better than how it really is, increasing the perceived value of your shares. Dont forget, if youre manipulating the price up with your wash trading activity, Im quite certain youll be able to cover the minuscule 0.1% fee. Basically, think of it as eBay allowing you to bid on your own items. Sure, you might end up winning your own auction and have to pay the eBay fee in a worst case scenario, but you might get other bidders to move so they dont miss out. And Continue reading >>

Wash Traders Will Increase Btc Price.. For A Short Period Of Time

Wash Traders Will Increase Btc Price.. For A Short Period Of Time

Wash traders will increase BTC price.. for a short period of time Noted economist Nouriel Roubini thinks the price of bitcoin is going to zero. Dr Doom also said that traders will use wash trading to prop up the prices. Wash trading in the crypto world involves someone buying and selling their own order to manipulate markets. And artificially props up the trading volume. Other market participant are seeing that the volume is increasing and enters in the market as well. His tweets followed comments on Bloomberg last week in which he called bitcoin the "biggest bubble in human history." If you think, we can improve that section, please comment. Your oppinion is imortant for us. WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information. 25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256 Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045 , which allows provision of financial services in the United Kingdom. Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financi Continue reading >>

Meet Spoofy. How A Single Entity Dominates The Price Ofbitcoin.

Meet Spoofy. How A Single Entity Dominates The Price Ofbitcoin.

Blog for @Bitfinexed on Twitter. Exposing fraud by largest Bitcoin exchange, Bitfinex/Tether Meet Spoofy. How a Single entity dominates the price ofBitcoin. This story is about a trader, or a group of traders, or possibly even Bitfinex themselves manipulates the price of Bitcoin. The past few months Ive slowly collected screenshots of a trader I like to call Spoofy. Youll see evidence of spoofing, wash trading, a sketchy scheme associated closely with Bitfinex known as Tether among other shenanigans. Spoofy makes the price go up when he wants it to go up, and Spoofy makes the price go down when he wants it to go down, and hes got the coin both USD, and Bitcoin of course to pull it off, and with impunity on Bitfinex. Phil Potter referred to me in an interview on August 6th, and claimed they have not seen the kind of activity Im talking about. This is a video showing activity on July 22nd, 2017 and contains Phil Potters comments along activity that he claims isnt happening. Spoofing & Trading manipulation on July 22nd. Since March 2017, Ive been warning people about the issues regarding Bitfinex and their disconnection from the traditional banking system. The issue regarding Bitfinexs banking woes is essentially on the backburner as prices have gone up significantly since then, but in my opinion, this is a very big driver of why the price of Bitcoin is exceedingly easy to manipulate. Spoofy is a regular trader (or a group of traders), that function primarily on Bitfinex, and in a limited fashion on some other exchanges who engages in the following practices: Places large bids ($2 million and up) for Bitcoin, usually just under a smaller bid order, only to remove them once someone starts to sell. These orders usually have a lifetime of minutes, or sometimes as short as 51 Continue reading >>

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