Bitwise Submits Report To SEC About Lack Of Transparency On Crypto Exchanges

By Rishma Banerjee

It has been revealed by recently published news, that a very comprehensive report has been submitted to the US Securities and Exchange Commission (SEC) by Bitwise that deals the issue of fake volumes on crypto exchanges, bringing it under the spotlight. They put forward a reason for the same: a definite lack of transparency in crypto exchanges.

It has been revealed that there exists a complicated relationship between the token issuers or project owners and crypto exchanges. The data aggregation sites that examine market capitalisation and trading volumes also indicate that any data produced is difficult to verify and therefore, makes it very dubious for investors who already have a hard time dealing with the asset’s volatility.

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An article by Forbes notes that this three-party relationship’s worst and most noticeable repercussion is the “absurd volumes” on a majority of crypto exchanges.

It is worth noting that the Bitwise report was only addressed as a comment to the SEC, where it was cited that there had been “dramatic improvements” in the Bitcoin spot market and arbitrage strength, while stressing on the fact that 95% of exchange volume had high chances of being falsified due to wash trading.

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Other reports have also mirrored the same findings. For example, The Block‘s analysis said that although showed a lower percentage (86%) was still a significant damning of crypto exchanges. Even the world’s leading crypto exchange, Binance, despite its claims of being clean and accusing others of wash trading, has been found to be equally guilty.
So even though the positive takeaway was that Bitcoin’s efficiency in the spot market was better than generally expected, the huge problem was that of the lack of transparency among most crypto exchanges.

The report scraped live trading data from 83 exchanges and 73 failed at least one of their tests for real trading volume, reporting this as “10.5 billion dollars out of the 11 billion dollars in reported daily volume (or – 95%) is either fake or wash trading”.