Huobi Exchange Denies Wash Trading Allegation On Its Platform Following Bitwise Report

Huobi Exchange Denies Wash Trading Allegation On Its Platform Following Bitwise Report

Following report by Bitwise pointing to possible wash trading on Huobi exchange, the company has denied any such possibility after reportedly conducting a thorough check on its platform. According to a spokesperson for the platform, wash trading is against the core values of the platform and cannot be allowed to flourish.

The spokesperson speaking on the outcome of the check on their system said:

“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.”

Bitwise has been conducting routine checks on exchanges and reported earlier this year that only Bitfinex, bitFlyer, Binance, Bitstamp, Bittrex, Coinbase, Gemini, itBit, Kraken and Poloniex reported correct trading volumes while the rest have been found to inflate their volumes. With the new report on Huobi, the company is taking precautionary steps to prevent any such occurrence in the future, the spokesperson said.

Though the report acknowledged that Huobi started reporting different market values just weeks after the initial report, it says the exchange had an “anomalous pattern” which suggested that some wash trading may be going on behind the scene, hence the latest report.

Wash trading is a situation in which traders connive to sell and re-sell an asset to each other in order to fake an increasing trade in that asset. According to Bitwise, this is a common phenomenon on most of the existing exchanges although it is unethical. Huobi’s decision to take a stand against such activities is commendable as it is the exchange that has openly spoken against it since the March report. Will other exchanges follow suit?