Summary # Recent data reveals a surge in manipulative practices and liquidity issues within Huobi’s trading volume since June 2023. Trade Size Analysis: Increased activity from volume-generating trading algorithms was detected, preceding public concerns about exchange solvency. Token Manipulation: Huobi’s founder and exchange-linked tokens (HT, TRX) were subject to manipulation, resulting in inflated trade volumes and token prices via transaction size adjustments. Wash Trading Criteria: Synchronized fluctuations in volume distribution skewness and fitting estimates have been observed across multiple spot markets (COMP, SOL, LINK, SUI, DOGE).
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Distinct surges in time-of-trade graphs indicate potential scheduled trading bots activity to obfuscate privacy coin laundering. Wash trading can also be a good explanation for such trading patterns. With many exchanges delisting privacy coins, OKEx’s Monero (XMR) and ZCash (ZEC) markets remained active through 2020 with abnormal trading patterns. XMR’s time of trade distribution on OKEx noticeably falls out of the common flow of activity observed on Binance and Huobi.
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On January 19, 2021, spot market trades on Gate.io showed signs of falsified numbers. Below are the distributions of leading, second, and third digits for the size of executed trades as compared to Benford’s law expected distributions. Evidence based on Benford’s law has been used by ACFE to discern naturally occurring statistical deviations from fraud.
First, second, third digit distribution of executed trade sizes on Gate.io, LTC spot market, Jan 2021.
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Throughout December 2020 and January 2021, SENSO token demonstrated suspiciously high and stable trade volume on Bittrex, KuCoin, and Poloniex. Observed trading patterns are consistent with wash trading.
Hourly volume on Bittrex, SENSO token, December 2020.
One of the ways in which new projects can gain recognition and adoption from users is by rising in rank on sites like CoinMarketCap. Project teams will often solicit the services of market makers who create fake activity on exchanges in order to boost the ranking of their token.
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