Large crypto exchanges appear to have stopped misreporting their trading volumes in 2019, a new study by Chainalysis says. According to the New York-based blockchain analytics firm, there are still some crypto exchanges including Bitforex that likely report fake trading volumes to simulate greater market activity and liquidity. Chainalysis posted the study on its blog on Nov. 15.

In the study, Chainalysis analyzed the top 10 cryptocurrency exchanges, known as the “Bitwise 10,” which were reportedly considered the only large exchanges that reported their actual volumes. Those exchanges include Binance, Bitfinex, Kraken, Bitstamp, Coinbase, BitFlyer, Gemini, itBit, Bittrex, and Poloniex.

Top 10 genuine volume reporters see 6 BTC in trade volume for every 1 BTC on-chain

The firm used the Bitwise 10 as a representative sample of large exchanges who report accurate trade volumes, and compared their data with volumes of other exchanges in order to discover potential suspicious activity. Specifically, Chainalysis found out that in a period between January 2018 and November 2019, the average ratio between trade volume and on-chain volume received for the Bitwise 10 accounted for 6:1. The data means that the Bitwise 10 see roughly six Bitcoin in trade volume for every one Bitcoin received on-chain.

Chainalysis further analyzed 25 other exchanges with large on-chain volumes out of the Bitwise 10 list. The firm eventually identified 12 more exchanges whose trade volume to on-chain volume ratios significantly differed from the Bitwise 10 in 2018, but have since declined more in line with the exemplary data. The 12 exchanges list included Huobi, OKCoin, UPbit, Bithumb, Bit2c, Bitbank, Bitso, CoinCheck, Coinfloor, CoinOne, Korbit, and Zaif.

12 exchanges including Huobi and Bithumb stopped misreporting volumes in 2019

Based on the data, Chainalysis concluded that it’s likely that those 12 exchanges were faking trade volume in 2018, specifically during the period between July and January 2019. Since 2019, the exchanges' trade volume ratios have tracked more closely with those of the Bitwise 10, suggesting that they have stopped misreporting volumes.

Ratio of Bitcoin traded per Bitcoin reviewed on-chain. Source: Chainalysis

Some exchanges are allegedly still practicing misreporting

While the majority of exchanges appear to have moved away from faking volumes, there were still some exchanges that saw suspicious activity. According to Chainalysis, reported a trade volume ratio of 40,000:1 in a period from January 2019 to November 2019. That means that Bitforex reported 40,000 bitcoin worth of trade volume for every 1 bitcoin that enters the exchange, compared to just 6 for the Bitwise 10.

Bitforex is ranked the 34th-largest exchange by trade volumes at the time of writing, according to Coin360.

Bitwise’s study in 2019 claimed that 95% of volume on unregulated exchanges was fake

Chainalysis’ new study follows a report by crypto index fund provider Bitwise Asset Management claiming that as much as 95% of volume on unregulated exchanges appears to be fake or non-economic in nature.

On Nov. 12, major crypto data supplier CoinMarketCap launched its new metric to compare exchanges and token pairs based on liquidity as a measure to prevent manipulation by exchanges.