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Gotbit`s team deploys bots for manipulating trading volumes to make a particular coin recognizable

As the cryptocurrency sector strives towards introduction of stricter regulations, there are still individuals that take advantage of the industry`s blind spots to develop their own business models through utilization of various manipulation methods.  

The latest example of а crypto-manipulation is Gotbit, who is a Russian based services provider. Gotbit`s team deploys bots for manipulating trading volumes to make a particular coin recognizable by one of the leaders in the crypto data provision – CoinMarketCap.

Alexey Andryunin, a 20-year-old Russian, states that manipulating trading volumes is pure business. He and his co-founder made programmable bots which trade coins and tokens between them on a given exchange. Trading volumes soar to the skies, and CoinMarketCap’s API sees that and puts the chosen cryptocurrency in its listing. This is a great way for unknown cryptos to take place under the spotlight and use the manipulated data as marketing tools.

The data manipulations seem to be a confirmation of Bitwise Asset Management’s statement that 95% of trading volumes for Bitcoin are not real. According to Bitwise, only around ten exchanges provide genuine and trustworthy information about their daily volumes.

Cryptobrowser.io experts firmly believe that companies like Gotbit will continue to exist because of the potential of such services. The trading volumes inflation is called “Wash trading” and it is not legally acceptable. Wash trading can be detected easily by either looking at patterns in trade history, intervals and sizes, or by diving straight into transactions for patterns of bid-ask spread trading.

The process of listing a specific crypto project on CoinMarketCap starts with the coin/token being listed on two smaller exchanges. After that, clients have to pay Andryunin a fee of 2 Bitcoins (around $20,000) to list the coin/token on CoinMarketCap. Representatives from the data provision website explained that a coin or token must meet a series of criteria before being eligible for a spot in the rankings: coins tokens must be listed on the two smaller CoinMarketCap exchanges; they must use blockchain; they have to have a direct contact with project representatives; there must be a working website, and etc.

Andryunin’s clients are companies with past ICO projects. The co-founder of Gotbit states, however, that only two or three of the 30+ companies “actually have made value, the others imitate activity to calm down the investors.

Exchanges, on the other hand, are more than happy with the circumstances, as more trading volumes resemble more new client opportunities. Also, exchanges have a high trading volume listing benchmark, which forces crypto projects to use companies like Gotbit.

Despite Gotbit’s agreements with over 30 companies, the time of such a business model is coming to an end, Andryunin states. Crypto regulatory frameworks and strict legislations will eventually kill the wash-trading.

The FATF, on the other hand, is making big moves into regulating the crypto market with their goal being regulatory requirements close to these on traditional stock exchanges. Andryunin, however, is not concerned about regulations, as he and his colleague are going to migrate towards Initial Exchange Offerings (IEO), which are close to ICOs, expect that they are being launched on exchanges.

Cryptocurrency Regulations Cryptocurrency Crypto Market coinmarketcap Regulation

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