The biggest deal in the cryptosphere in March was the Bitwise Asset Management team’s presentation to the SEC. During the presentation, the team aired out the crypto community’s dirty laundry by claiming that 90-95% of exchanges are not being honest about their volume.
Similar findings were discovered a week earlier by The TIE, a platform for traders that provides crypto predictive sentiment analytics, market data, and fundamental insights.
🔍🧐 Cryptocurrency exchange trading volume investigation 🧐🔎
Our team set out to determine whether volumes reported on cryptocurrency exchanges were genuine.
— The TIE (@TheTIEIO) March 18, 2019
Co-Founder of The TIE, Joshua Frank was interviewed by BLOCKTV’s Yael Lavie to provide more insight on how the company reached its shocking conclusions. Frank shared the research was meant to provide insight internally.
“We are working to add cross exchange trading and smart order routing for our customers and we were trying to come up with a better way of consolidating prices across exchanges. We thought we should reflect our pricing based on volumes and slippage in the market,” he said.
Frank went on to explain that the company was looking into what pricing sources to use when computing pricing, market cap, and volume, out of which the report that shook the cryptoverse was born.
"It was just mind-boggling"
The report was astonishing to anyone who read it, but The TIE team was no less surprised. “The extent to which some exchanges were doing it really surprised us. One of the metrics that we looked at was the amount of website viewership that these exchanges had and the volume that was traded, and we basically looked at the average traded volume per website visit. In some cases, the exchanges were reporting $50 per website visit, but what was really shocking was when some were reporting $400,000. It was just mind-boggling,” he said.
The TIE released the report to start a conversation among people in the space “we were very confident that this was an issue, and I’m happy that a lot of data sites are taking action on it and changing the numbers that they are reporting for volume.” Furthermore, Frank shared the company is now working with a lot of the top exchanges to come up with more transparent ways to report volume. The goal is to remove those companies that are in the wrong so that the emerging industry can flourish more positively.