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DX Exchange CEO: Thousands of Unregulated Exchanges Generating Fake Volumes, Pump & Dumps

Daniel Skowronski, the CEO of DX Exchange,  has warned about fake volumes on unregulated exchanges. Skowronski revealed that digital currency trading platforms, of which there are now thousands all over the world, have been manipulating the market by generating fake volumes.

Market Makers Being “Recruited” By Exchanges

The DX Exchange CEO said the majority of exchanges throughout the world have either no regulations (that they follow) while some are just in the process of obtaining regulatory approval. He added that there are some trading platforms which are market makers themselves, however they might not even be authorized to do so.

For instance, DX Exchange is not permitted to be a market maker and there are many trading platforms who are not either. However, these platforms often bring on market makers who then generate fake volumes and/or orchestrate pump-and-dump schemes.

Two Ways DX Exchange Tracks Down Manipulation

Skowronski further noted that there are a lot of crypto exchanges that allow trading bots which also are able to do pump-and-dumps. “Two ways that DX Exchange helps to eliminate this is using a surveillance system which looks at the exchange and all the activity and it can follow whether there’s a pump and dump happening [with] a particular trading  pair”, Skowronski noted.

Skowronski explained that DX Exchange’s software also allows it to detect if there’s “strange” or unusual volume that might be there. In some cases of market manipulation, the pricing of coins can be a bit off (from average rates), the DX Exchange CEO said. He added that his firm “has really, really good insight to what’s happening on exchanges across multiple pairs and volumes.”

All New Cryptos Must Have Market Maker

Skowronski also explained that every cryptocurrency that wants to get listed on DX Exchange is required to have a market maker. The maker cannot be a bot and the exchange carefully examines each new coin before listing. Before the coin or token can start trading, DX Exchange’s management team has to approve the market maker for the crypto.

Skowronski’s comments regarding fake volumes and unregulated exchanges have come at a time when digital currency prices continue to fall to new lows. Bitcoin (BTC) price hit a 15-month low on December 14th when its price dropped to $3,230 and at press time, the flagship cryptocurrency is trading even lower at about $3,195.

There’s now also a chance that the market capitalization of the crypto market could drop below $100 billion. Just about a year ago, this same market was worth over $800 billion. Just let that sink in.