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In the early months of 2021, many cryptocurrency tokens had periods of significantly increased volume. These spikes in volume were analyzed by CoinMarketCap, a leading source for cryptocurrency data insights, concluding with a high confidence that the increase in volume was legitimate. However, when Cryptocurrency Research Institute (CRI) analyzed the data directly from the exchange, a different picture emerged: anomalous trading activity, whereby a large number of trades were taking place without matching any visible orders. In this paper, we outline our research carried out in March and April of 2021 using orders strategically placed via a third party to further analyze the market activity. We demonstrate our methods and the statistical analysis which seems to
present strong evidence for wash trading taking place. Our research shows a blurring of the lines between exchanges acting as agents and as principals. Future work could include the development of a code of conduct for exchanges. This could act as means of self regulation for exchanges, protect market participants, and reduce potential systemic risks to the markets.
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