(BlockBar) Huobi Global, a digital currency trading marketplace, said that it does not engage in any wash trading and has taken steps to discourage such activity. Livio Weng, CEO of Huobi Global said that the exchange “is not involved in any wash trading.” According to him any such actions would go against the exchange’s “core values.”
A report by Bitwise Asset Management which hinted that Huobi reported inflated trading volume “surprised” its team. Huobi did not find any evidence of systematic abuse, he said, but added:
“We did identify a few of our market makers conducting what we suspect may have been wash trading for the sake of performance and marketing purposes. We have already communicated with these market makers and they have discontinued the strategies in question.”
Huobi is in the process of updating its policies to avoid potential wash trading issues going forward. It is to be noted that Wash trading occurs when participants collude to sell an asset back and forth to each other at ever-higher prices and creating the illusion of a rising market.
According to a report published by Bitwise it is said that the only exchanges that appeared to report genuine trade volumes as well as their reported volumes in comparison with the overall market were Binance, Bitfinex, Bittrex, bitFlyer, Bitstamp, Coinbase, itBit, Kraken, Gemini, and Poloniex.
As reported, Huobi had an “anomalous pattern” which indicated a “resurgence of large trade sizes,”. This pattern was “consistent” until the initial Bitwise report was published. “Then it completely disappeared within three weeks.”
Bitwise has not been able to explain why the reported trade volume shifted. But it is worth noting that the new report suggested that “those engaging in wash trading at Huobi changed their trade size signatures to be more in line with our detection methods.”
Bitwise further added: “We also recognize that Huobi might have taken action to clean up wash trading on their platform within that time frame, but that view is challenged by the fact that Huobi’s reported bitcoin trade volume did not meaningfully drop during that time.”
