Within the crypto world, few are the institutions that hold the importance of cryptocurrency exchanges. Well, these companies constitute the market within which crypto assets are traded. Allowing them to make themselves known, define their market value, exchange for each other and obtain resources. However, is it possible that exchanges are cheating on us? According to the Chinese NIFA watchdog, yes.
The need for cryptocurrency exchanges
Taking what we take for granted is a common phenomenon even within the digital world. And that happens on many occasions with cryptocurrency exchanges.
Well, despite constantly using them, and being the fundamental basis of the crypto world, we spend very little time considering the importance that they have for cryptocurrencies and Blockchain technology.
And it is that, without the exchanges, the crypto world would be basically doomed to paralysis. Without there being a place where new Blockchain projects could put their tokens for sale to obtain resources, nor a reliable means to determine the value of different cryptocurrencies, guided by the forces of supply and demand.
Therefore, it is understood that honesty and transparency are essential for the proper functioning of the crypto market. Since, if the cryptocurrency exchanges began to falsify figures, or intervene in the buying and selling processes, confidence in the system would soon be lost. Seriously affecting the development of cryptoactive and Blockchain technology.
Chinese watchdog tamper alert
Unfortunately, it seems that this would be the situation for the world’s largest cryptocurrency exchanges. According to a warning released by the National Internet Finance Association of China (NIFA), a Chinese watchdog that has studied the behavior of the crypto market in recent years.
According to NIFA, the main exchanges would be manipulating the market in two different ways. First, falsifying the volume of transactions that actually occur on their platforms, by using bots that are responsible for executing the purchase and sale orders of their users.
Moreover, lying about the benefits of cryptocurrencies to potential investors. Promising that they offer higher returns than other traditional assets such as gold and silver. In order for them to register on their platforms and start investing with them.
Although further investigation would be necessary to ensure that these allegations are true, in the crypto world there are already antecedents of accusations like these. Among which is included the one launched against BitFinex for being behind the 2017 bullish rally. What makes the information released by NIFA, our Today’s Data here in CryptoTrend.