Binance is one of the most popular cryptocurrency exchange platforms in the cryptoverse but turns out it doesn’t make the cut for being the cleanest exchanges in the industry. According to a market surveillance report by the Blockchain Transparency Institute (BTI), Coinbase has beaten the Malta-based crypto exchange in this area.
The Blockchain Transparency Institute or the BTI comprises of a group of blockchain data researchers and enthusiasts who are endeavoring to bring about more honesty and transparency in the crypto sphere. The institute believes that since this is the technology upon which the future of the society is being built on, a culture of trust and integrity is essential.
BTI published its latest report on 19th September, the fifth market surveillance report of its kind that authenticates the volumes being reported by cryptocurrency exchanges across the board. The institute employs the BTI Verified program for this purpose, which was introduced over six months back.
According to the report, Coinbase continues to be amongst the cleanest exchanges since BTI’s latest report. In addition to Coinbase, several other exchange platforms have made that cut including, the United States-based Kraken, the South Korean exchange UpBit, Malta-based OKex, United States-based Poloniex and the Chinese exchange platform Bibox.
The way the BTI ranking works is that, through its proprietary algorithm the institute cleans all the wash trading from the projected volumes of exchange platforms, thereby unveiling their real volumes. Wash trading refers to the act of simultaneously buying and selling an asset in order to falsely drive up trading volume, and continues to be one of the major problems plaguing the crypto ecosystem.
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Even the platforms that have managed to make BTI’s list of the Top-40 exchanges on the basis of real trade volumes harbor the problem of wash trading, for example OKEx and Bibox. The report reveals that these two exchanges lead with the highest percentage of wash trading. However their real volumes, minus the wash trading still places them amongst the top exchanges.
In one of its early reports published last year in August, BTI claimed that more than two-thirds of the supposed top cryptocurrency exchanges reporting to CoinMarketCap had fabricated their trade volume reports. Then again later in the report released earlier this year in April BTI discovered that 17 of the CoinMarketCap Top 25 exchanges to be over 99%+ fake with many greater than 99.5% fake volumes, including 35 of the top 50 adjusted volume rankings.
The institute tackles this issue through its methodology that is based on comparing the total numbers of unique site visits with reported volumes. BTI’s earlier report explains that their algorithm connects to exchanges via their public API and websocket connections. Trades are then analyzed and the consequent reports are sent to exchanges to further investigate the accounts making these trades.
The latest report by the BTI states:
Since the start of 2019, global wash trading has reduced by 35.7% among the real Top-40 exchanges. The process of sharing our data reports with many of these exchanges has resulted in enhanced mechanisms for detecting wash trading accounts and shutting them down
Furthermore, the report also analyzed trade volume by country, which revealed that Japan and the United States lead the world when it comes to clean exchanges. BTI accredited this to the legal and regulatory standards in the two countries. However, it also clarified that stricter regulations don’t always mean clean exchanges by giving the example of the South Korean exchange Bithumb. The institute’s data shows that Bithumb has been heavily wash-trading Dash and Monero for the entire year.
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The fact that Binance, the largest cryptocurrency exchange platform by daily trade volume, didn’t make the cut for the “cleanest” exchange remains the most intriguing aspect of the newly released report. In its last report of April 2019, BTI explained that Binance was unverified on their list as they discovered over 10% wash trading on the platform.
The report explained that market makers and bots were taking advantage of around 30 pairs on the exchange, which were wash trading between 25% and 75% of Binance’s total volume. However, that doesn’t take Binance’s reputation down the drain as the report further added that the exchange’s top volume pairs are clean.
We have found Binance to be about 85-90% clean depending on the day.
The latest report has finally added Malta-based platform as it is now under 10% wash trading after hovering close to 20% through the first few months of 2019. Maybe by the time the next report by BTI is released, Binance manages to bag the title of the cleanest exchange.
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