How Cryptocurrency Exchanges Spam CoinMarketCap (With Fake Volume)


The other day, Larry from The Block sent out
this Tweet, nothing that Binance was number 24 on CoinMarketCap’s list of exchanges, and
that the third ranking exchange was called Negocie Coins. It’s probably an exchange you’ve never heard
of. You could probably call up everyone you know
and have them call up everyone they know, and no one has actually made a trade on this
exchange. There’s also this exchange called FCoin. What the eff is FCoin? In order to explain how this is happening,
I’ve created this presentation. My name is Clay Collins, and I’m the co-founder
and CEO of a [00:00:30] market data company called Nomics. What you’re seeing here are a bunch of exchanges,
many of which you’ve never heard of, and we’re going to talk about how exchanges use ticker
stuffing and volume spamming to game the system. I should note that these fake volumes aren’t
just appearing on the exchanges index page, on CoinMarketCap, they’re also appearing in
the markets pages. For example, here are a list of the top bitcoin
markets, sorted by volume. Again, you’re probably seeing exchanges that
you’ve never heard of. In contrast, if you look at rankings on [00:01:00]
sites like ours, Nomics.com, this is the exchange listing, you’ll see exchanges that you’ve
probably heard of, that you’ve probably traded on. As I said before, what’s occurring is called
exchange spamming. It’s a form of volume spamming. In particular, what we see most frequently
is something called ticker stuffing. How does ticker stuffing/spamming work? In order to explain that, I need to first
explain how tickers work. What is ticker data? A ticker really consists of a market symbol,
a timestamp, and then open, close, high, [00:01:30] low, and volume for a 24-hour period. If you wanted to engage in ticker stuffing,
here’s how you’d do it. Right on this table we have a set of data
that represents one ticker. As you can see, this ticker contains a trading
pair, and open/close high and low, a timestamp, when the ticker was generated, and a volume. If we wanted to stuff additional volume in
this ticker that we’re sending over to CoinMarketCap or other data aggregators, all we have to
do is modify the volume [00:02:00] number. That’s all we have to do. It’s really simple. You don’t have to modify a huge set of trades,
you don’t have to modify a huge set of candles, you simply adjust the number. Let’s say we’re a little bit more ambitious
and we want to say that we did a billion dollars in volume during this 24-hour period, that’s
all we’d have to do and then we just send that candle right over. It’s kind of like stuffing a duffle bag full
of crap. You just open the bag and you just keep on
shoving volume, and you just shove it. If you get good at this, you can pop right
to the top of the chart. How does ticker stuffing [00:02:30] benefit
exchanges? It allows them to get to the top of the rankings,
which gets them listing fees from ICOs that want to get their coins listed on those exchanges,
it gets them more traffic and attention from CoinMarketCap, and it sets them up to run
IEOs and take their cut of those. I hope you found this short tutorial helpful. We’re doing everything we can to prevent exchanges
from benefiting from ticker stuffing and exchange volume spamming. If you’d like to learn more about what we’re
doing go to Nomics.com/exchanges. Thank you.

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