A new report from data researchers at the Blockchain Transparency Institute (BTI) claims that the majority of the top 25 Bitcoin (BTC) trading pairs listed on CoinMarketCap (CMC) are based upon “grossly” inflated false volumes. The researchers’ findings for December were published in BTI’s “Exchange Volumes Report” on Dec. 13.

BTI presents its report as “a deeper dive into specific trading pairs on exchanges which are showing clear evidence of wash trading.” The data has reportedly been compiled by using algorithms to analyze volume data points and order books, as well as by consulting with “market makers, high frequency traders, and trade surveillance consultants” over a period of three months.

The Institute states it has thereby “calculated the true volume of the CMC top 25 BTC trading pairs,” finding that:

“Most of these pairs’ actual volume is under 1% of their reported volume on CMC. We noted only 2 out of the top 25 pairs not to be grossly wash trading their volume, Binance and Bitfinex.”

“Wash trading” is the term for a process whereby a trader (or bot) buys and sells an asset for the express purpose of artificially inflating volumes to falsely signal interest in that asset, thereby feeding misleading information to the market. The report concludes that, based on its findings, “over 80% of the CMC top 25 BTC pairs volume is wash traded.”

BTI’s volume analysis for the top 25 BTC trading pairs on CoinMarketCap. Source: BTI

Liquid also shows a 100 percent match of its reported volume to its actual volume over a 24 hour period.

Among those high-profile crypto exchanges reportedly engaging in wash trading is allegedly OKex. According to BTI, algorithms detected manipulation for “just about all” its top 30 traded tokens. Based on this evidence, BTI states it has added the exchange to its “Exchange Advisory List,” which it has compiled in order to caution token creators against paying listing fees to certain exchanges.

“Clear evidence” of wash trading was also found for Huobi and HitBTC, “but to a lesser degree” than OKEx, according to the report. BTI further states it analyzed Bithumb and found “a large amount” of wash trading primarily with altcoins Monero (XMR), Dash, Bitcoin Gold and ZCash (ZEC); the “top wash traded tokens” on Bithumb, according to the report, vary for each given month.

According to BTI, many crypto exchanges with seemingly high reported volume in truth “exist solely to collect [listing] fees while their bots run their exchanges.” The report estimates that the average crypto token project spent “over $50,000 this year” on listing fees from exchanges on its cautionary Advisory List, with around $100 million spent in 2018. “Over 50 exchanges [...] wash trading over 95% of their volumes,” the report continues, some of them making “over” $1 million this year solely via fees.

As reported, the United States Commodity Futures Trading Commission (CFTC) has this year demanded extensive trading data from several crypto exchanges as part of a probe into possible manipulation in the crypto spot markets and its potential impact on BTC futures.

Also this year, the U.S. Department of Justice (DOJ) opened a separate investigation into BTC and Ethereum (ETH) price manipulation, looking into how traders may be manipulating prices through illegal spoofing and wash trading.