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Fact Checking Cryptoexchange Volumes 2

In a March 10, 2018 article posted to the Medium, trader and investor Sylvain Ribes' charged that many top exchanges (as measured by volume), and OKex in particular, are greatly exaggerating their volume. Ribes' article has been widely disseminated by numerous cryptocurrency experts, who praise his methodology and insights. Ribes' analysis did not find evidence that HitBTC or Binance are involved in falsifying their trading volumes, though Ribes has acknowledged that both deserve a closer look. His analysis sparked praise from Binance's CEO, who called it a "good in-depth analysis."
Below you will find a deep dive of our research.


The request is that we analyze "the first two claims" made in the linked article, "Chasing fake volume: a crypto plague," by Sylvain Ribes. We understand the first two claims, as laid out in the articles summary, to be as follows:
1) More than $3 billion of all cryptoassets' volume is fabricated, with "some figures being overstated by as much as 95%."
2) OKex, the #1 exchange as rated by volume, is the primary offender.
However, since the question pertains to HitBTC and Binance, we have to understand the above claims accordingly. Thus, we interpret #1 to mean that we are to determine whether the author is correct that he found evidence of gross overstatement of trading volume in several cryptocurrency exchanges and interpret #2 to verify whether HitBTC and Binance lack the evidence of misrepresenting their trading volume that implicates OKex.
Since the question relies on an advanced understanding of cryptocurrency exchanges, we did not attempt to prove or disprove Ribes' claims ourselves. Instead, we sought other articles by other financial experts.


Ribes' analysis is highly-regarded by other cryptocurrency experts, for example being presented on the All Cryptocurrencies news page under the title, "Study Reveals Major Cryptocurrency Exchanges Volume Fabricated." This article states that Ribes' test does indeed prove his case, at least regarding OKex, Kraken, GDAX and Bitfinex. It unfortunately does not directly reference the same tests conducted for HitBTC and Binance. Ribes' study has also been disseminated through numerous other channels, such as Crytocurrency Investing, the French Crypto Analyse site, and the Chinese Jianshu site, among many others.
Ribes challenged both OKex and Huobi Pro to comment on his study on Twitter. Neither responded to Ribes directly, and though both companies have active Twitter accounts, we could not find any acknowledgement or response to Ribes' article in either. However, OKex did respond in an interview on Jianshu; translation proved problematic and since OKex is tangential to the question we did not attempt to dive deeply into this response. The short version of it is that OKex denies wrongdoing, though Jianshu seems unconvinced. We were unable to find a response by OKex in any English language source, which we find to be telling.
Though we found dozens of articles referencing Ribes' work positively, we did not find any third party who took issue with his methodology or calculations. Indeed, as one Australian observer notes, "It's not possible to overstate how incredible these results are. It's not a small difference, or within any remotely conceivable margin of error. These are extraordinarily hyper-blatant numbers." By all accounts across innumerable articles and papers, Ribes' work is rock-solid and completely reliable.


So what does this mean for HitBTC and Binance? As explained on, the results for HitBTC and Binance are interesting, but not immediately suspicious. Binance CEO Zhao Changpeng called Ribes' study a "good in-depth analysis," adding with regard to Binance's policies: "We like liquidity, but we don’t like 'flash' liquidity, which are used by many HFT 'market makers' — Binance believes having these restrictions help the much larger number of retail traders." We did not find any official response from HitBTC on their Twitter feed. Given that Ribes says that their numbers "cannot be deemed significant," they may simply not have felt the need to comment.
While Ribes' initial work does not paint HitBTC and Binance in a bad light, others have charged that "HitBTC volumes are obviously fake." Ribes has acknowledged the concern, stating, "I will definitely try to model more accurately what should happen in lower pair volumes, and have a more in-depth look at HitBTC and Binance in the future."


Sylvain Ribes' article, "Chasing fake volume: a crypto plague," has received wide attention and even acclaim from experts in cryptocurrencies, none of whom have questioned his methodologies or analysis. To answer the question of the two claims made in Ribes' piece: 1) It seems beyond a reasonable doubt that many of cryptocurrency exchanges are overstating their volume; however, Ribes' current analysis does not implicate HitBTC or Binance. 2) OKex is definitely the biggest offender, and even if some exaggeration of trade volume is occurring at HitBTC or Binance, it is so small that Ribes' test did not detect it, though he has promised to look more closely at both exchanges in the future.

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Fact Checking Cryptoexchange Volumes 1

Sylvain Ribes's article in Medium alleges that two of the top exchanges, Okex and Huobi, have reported "fake volume"; that is, over-reporting their own trading income figures in order to maintain top ratings or out-perform other exchanges. This claim is supported by Bobby Lee's (CEO of BTCC Points) statement that both companies inflate their volumes through wash trades (that is, purchasing their own sales). Our research yielded several user accounts of each company's dishonesty and manipulation, suggesting that the article's base statements are likely accurate.


The allegations in this recent article are ground-breaking, based on new research; therefore our research cannot pinpoint a true-or-false answer. We researched news articles and other reports in an attempt to validate the claims, but the only articles found were reporting from the same data set as the original article or were articles sponsored by OKex or Huobi.

The primary source supporting the article's claims is a statement from Bobby Lee, the CEO of BTCC, one of the world's longest-running crypto-currency exchanges. Mr. Lee is regarded as an expert in the industry, as he helped build the bitcoin industry to its current success, getting his start from the early days of the internet. Additionally, Mr. Lee's location in China provides him with an insider's view of the Chinese perspective on bitcoin as well as the Chinese government's unofficial attitude towards it.

After exhausting these paths, we broadened our search to include more general information about these platforms and their trustworthiness. Forums for customer feedback yielded many negative reviews as proof that these companies scam members and manipulate data. These accusations, along with Bobby Lee's statement and the statistics in the initial article, lead us to assume that the allegations of fake volume are based in fact.

General Findings

Bobby Lee stated that it is "common knowledge" that Chinese exchanges artificially inflate their volume, largely through wash trades. That same statement article also includes a quote from OKex's ex CTO, who reported that the company uses bots to create orders that only trade with other OKex bots (programs designed to automatically carry out a process), not with actual users.

User reports suggest the same. One user suggests that both OKex and Huobi use bots to trade with each other/themselves to show an increased volume and lure more people into the fray. One bitcoin trading source also suggests these companies use bots or another software that mimics trades to shown inflated volume. Another alleged scam involves delaying the organic (real) trades or creating fake walls to show more volume.

Both companies also have a history of not honoring their own statements. In 2017, Huobi and OKex said that their service closures would only cover yuan-based crypto trading; the following day, they announced that they would end all of their crypto-exchange markets in any form. As a result, company executives have been barred from leaving Beijing in an attempt to force cooperation with government investigations into their platforms.

One source mentioned that companies can unleash bots on their own trading floors, boosting volume and bringing in profit. However, this capability is a gray area as far as whether it is considered fraudulent because the trades did actually occur and real users can trade against them.

Findings: OKex

Reviews of OKex illustrate an overall distrust of the company and accusations of scams. An OKex member reported that the company's staff accessed his account, changed the account owner's name and address and locked the account in an attempt to retrieve his funds.

Findings: Huobi

In general, potential users report concerns about the security of the platform. One member's complaint suggests those concerns are valid; the member reported that the company manipulates coin prices and launch times. Specifically, he stated that Huobi provides a start time for a coin launch, then launched ten minutes earlier than promised at inflated rates. Other users alleged that Huobi took money from their accounts to cover an internal mistake, even going so far as to accuse the company of violating Chinese laws.

Another report details a promotion offered to the public in January 2018 where participants could purchase Huobi tokens and receive additional tokens as a bonus. However, on these promotion days, the tokens sold out within minutes, leading to questions about bots buying the tokens to prevent users from doing so.


These Chinese exchange platforms' tactics could very well affect the worldwide bitcoin price.
All the user reviews point to the same sentiments: "Beware," "Stay away," and "SCAM," leading readers to the conclusion these companies can and will manipulate users and data and should be avoided.


Both Okex and Houbi have been faced with multiple allegations of scams, data manipulation, and inflated trade-volume reporting. Industry expert Bobbie Lee condemns both for the same. Both are generally distrusted by their own members and are under government investigation. While these research findings do not implicitly confirm the claims in the Medium article, they do lend credibility to the claims, where one important fact outshines the rest: Both Okex and Huobi have the ability to falsify trade volumes, by inside staff intervention and/or bots.