OKCoin, once the second largest mainland China-primarily based bitcoin exchange (following BTC China) according to volume, has been accused of faking its trading volume data.
The website stopped taking new deposits in the aftermath of the Chinese central bank implementing a ban disallowing banks and third-party payment solutions from working with bitcoin exchanges, leaving traders temporarily unable to charge their fiat currency accounts or cash out on some exchanges.
In the days following rumours of the ban, whilst traders panic-sold their bitcoin holdings and would-be purchasers have been barred from creating deposits into their accounts, a lot of were surprised to uncover that the trading volume on OKCoin remained unrealistically high.
The exchange prices, despite plunging, maintained levels on a par with other exchanges such as Huobi.com, which circumvented the ban by allowing traders to charge their accounts by transferring income to its CEO’s personal bank account.
The concern was first raised by a person under the pseudonym Shi Diaomao, a self-proclaimed bitcoin arbitrageur who tends to make profit by buying and promoting BTC on distinct platforms to exploit the exchange rate gap.
&ldquoShi concluded that the genuine transaction volume could be as low as 1 tenth of what the organization purported to exchange.&rdquo
In his article posted on 20th December on Xueqiu, one particular of China’s most well-liked investor’s social media platforms, Shi claims that in a two-hour period on 19th December, OKCoin’s information indicates that more than 30,000 BTC changed hands.
Nonetheless, by comparing the quantity with the tally of promoting and purchasing orders that had been displayed separately, Shi concluded that the genuine transaction volume could be as low as a single tenth of what the business purported to exchange.
Shi said after noticing the discrepancy, he immediately contacted the website’s client service rep, who failed to gives a plausible explanation and later became unresponsive on Xueqiu.
Throughout the procedure of communication, Shi saw that the displayed volume abruptly plunged, which reinforced his suspicion that the website had previously faked its trading volume and was correcting it now that it was in danger of becoming caught red-handed.
In an online audio interview, Shi said that he would not get in touch with OKCoin out and accuse it of manipulating the exchange price, but he cautioned traders against the exchange, claiming that it “plays both the player as well as the referee”.
In response, Xu Mingxing, CEO of OKCoin who is also believed to be a single of the biggest bitcoin holders in China, issued a really short explanation, in which he attributed the discrepancy to the firm permitting large traders to trade through its API rather than the webpage interface – an explanation, if accurate, that could be somewhat hypocritical provided that only a couple days ago Xu wrote a statement criticizing the use of “high-frequency trading software”.
A lot of perceive Xu’s explanation as a cover-up, amongst them, some Chinese bitcoin celebrities such as Li Xiaolai and Zhao Letian who posted on Sina Weibo agreeing that OKCoin’s information was problematic.
Zhao Letian’s posting states:
“The two graphs show the industry depth of BTC China and OKCoin. Regardless of the great distinction of market place depths, their trading volumes are very close, which can only imply that one is cheating. The reason that I stopped going to OKCoin is that it is really tough for me to acquire more than 1000 BTC (at one particular time).”
Users also question OKCoin’s claim that it is the world’s largest litecoin exchange.
1 posting published on 19th December on Sina Weibo says:
“The every day transaction of litecoin [on OKCoin] yesterday has reached an unprecedented nine million, but there are only a total of 20 million in existence. How can I ever think it?”
Xu Mingxing was previously scheduled to host a Q&A session on Xueqiu on 20th December, but it has because been cancelled.
As of two:52 PM CST, 21st December, the daily trading volume displayed on OKCoin is 4,215.52 BTC, which has shrunk dramatically from its earlier level of tens of thousands per day.
Chinese stock market place image via Shutterstock
View Chinese Bitcoin Exchange OKCoin Accused of Faking Trading Data on CoinDesk.
Chinese Bitcoin Exchange OKCoin Accused of Faking Trading Information
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