The National Internet Finance Association of China(NIFA) has issued a warning for investors who have been associated with the crypto-verse about the growing risks of the investment in the field especially crypto exchanges who are known for manipulating trading volumes on a regular basis.
NIFA is among the major Chinese Financial watchdog and is affiliated with the Chinese Central Bank. The statement came on Thursday where it noted that the research from their committee has shown many foreign crypto exchanges indulge in faking trading volume and wash trading to show a heightened number to lure new customers.
Given, NIFA is China’s Central Bank affiliated watchdog, it is also trying to push back the narrative that digital assets like Bitcoin are safe haven.
NIFA noted that the recent crypto market crash is a piece of clear evidence that Bitcoin and cryptocurrencies are not safe-haven assets like Bitcoin and Gold. The agency said,
“In our sampling analysis based on trading data from some of the exchanges, the daily trading turnover rate for more than 40 coins is over 100 percent, while more than 70 coins’ rate exceeds 50 percent,” NIFA said.
“Despite the relatively low price and small market value, there have been massive trading volumes.”
NIFA claimed that its analysis report shows that foreign crypto exchanges have divulged in faking their trading volumes with the help of bots while quite a few have blatantly copied the trading volume data of other exchanges and tried to pass it off as their own. The agency further accused these exchanges of misguiding investors on the nature of these digital currencies. NIFA said,
“After tricking investors into investing in crypto, some exchanges will manipulate the market through a range of trading techniques to make the investors’ assets.”
Exchanges are known for abruptly shutting their service citing maintenance reasons to avoid traders from trading on several occasions. While not every exchange do that…