Bithumb is inflating its daily trading volume by as many as 15,000 times, according to the CoinMarketCap report.
Bithumb’s reported trading volume stood at $3.3 billion on Nov.5, making it the world’s largest cryptocurrency trading exchange. Bithumb is three times larger than the runner-up BitMax and four times larger than Binance.
When Bithumb’s reported volume is adjusted, its real trading volume amounted to $280,812 on Nov.1, far lower than its reported volume of $1.7 billion. Bithumb is ranked outside the 146 cryptocurrency exchanges worldwide according to its adjusted amount. Such cryptocurrency exchanges as Binance, OKEx, and Coinbenet have no or little differences between their reported and adjusted quantities.
According to the CoinMarketCap, the adjusted trading volume reflects transactions conducted only through payment of fees. Bithumb might have inflated its trading volume for marketing promotion.
Why does Bithumb spend more than 100 million won (about$975, 000) daily to expand trading volume? Analysts said Bihthumb believes retaining the No. 1 position in trading volume would attract more cryptocurrencies on its exchange. It might have heavily inflated trading apparently to boost its market value ahead of its sale to BK Consortium, a Seoul analyst said.
BK Consortium took over Bithumb at 400 billion won last month. It signed a memorandum of understanding with American crowdfunding startup SeriesOne previous month to open its security coin exchange in the United States sometime before June next year. Once Bithumb’s trading volume manipulating violates the U.S. law, the Securities & Exchange Commission might not issue a license to the Bithumb-SeriesOne venture next year, the analyst said.
Block Media contacted Bithumb for comment, but it did not return the call yesterday.
