The cryptocurrency market is a high-octane playground for day Lambo dreamers and investors. It has made some super-rich, almost overnight and reduced others to the brink of bankruptcy. And of course, amid all these chaotic happenings is a rambunctious side of the industry, where questionable practices make the market tremendously murky.
BitForex, for example, handles over $5 billion in transactions daily, while the London stock exchange, a global force that has been in existence for over two centuries still struggles to consistently match its figures. The platform also beats its more popular competitors in trade volume, despite it having contrastingly less traffic.
The result is that investors are unsuspecting investors are likely to be lured in by the impressive trade volumes, which give false credibility to an exchange through artificial activity. However, the reality of what’s actually going on hits clients once they try to cash out, which can turn out to be a major headache.
Hard to Clamp Down on the Cryptocurrency Exchange Practices
Wash-trading is a practice that is hard to stop because there are trades that look similar to it that are undertaken for legitimate reasons. In a recent interview with Unchained, Binance’s CEO, Changpeng Zhao, also known as CZ highlighted the complexities of curbing the practice as well as other market-manipulation activities.
Binance cryptocurrency exchange CEO, Changpeng Zhao (right) with Singapore Prime Minister, Lee Hsien Loong (left).
Asked about his views on the recent move by ShapeShift to introduce stringent Anti Money Laundering (AML) and (Know Your Customer KYC) after being accused of indulging in market-manipulation prices, CZ declined to comment saying it is hard to judge allegations from the outside.
On the company’s move to adopt new policies following the market-manipulation claims, he said that there are many internal factors taken into consideration when making such decisions. He expressed confidence that Erik Tristan Voorhees, ShapeShift’s co-founder most likely made the best decision for his company.