• 16 hours General Motors To Spend $2.2 Billion On Detroit Electric Vehicle Plant
  • 18 hours Copper Slides Under Coronavirus Concerns
  • 20 hours Low Gold Miner Valuations Reveal Upside Potential For The Industry
  • 22 hours JPMorgan Urges Investors To Buy The Coronavirus Dip
  • 24 hours The Survival Of A $2.7 Trillion Market Rests On This Tiny Niche
  • 2 days U.S. Moves To Bar Iranians From Investor Visas
  • 3 days Why Germany Is Going To War With Gold
  • 4 days Gold Is Still Cheap Compared To Stocks
  • 5 days Are Cryptocurrencies Funding Terrorism?
  • 5 days Promising Oil Companies To Watch In 2020
  • 6 days Could China's Coronavirus Outbreak Impact U.S. Stocks?
  • 6 days Tesla Stock Continues To Soar
  • 7 days What New Economic Data Reveals About Gold's Trajectory
  • 8 days The Lucrative New Tech Hijacking Your Privacy
  • 8 days The Biggest Loser In The China-U.S. Tariff Tit-For-Tat
  • 9 days Trade War Takes Its Toll On Shipping
  • 11 days Is $90 Oil Possible? An Interview With Jay Park
  • 12 days Billions Of Dollars Are Flooding Into The Flying Taxi Space
  • 12 days Is This The Most Important Energy Project Of 2020?
  • 13 days Startups Are Dying To Give You A Better Death
China's Boldest Move Yet To Ditch The U.S. Dollar

China's Boldest Move Yet To Ditch The U.S. Dollar

It appears that China's blockade…

Iran Looks To Launch Its Own Cryptocurrency

Iran Looks To Launch Its Own Cryptocurrency

Iran has proposed the creation…

Are Blockchain Stocks Poised For A Comeback?

Are Blockchain Stocks Poised For A Comeback?

Blockchain stocks came crashing down…

  1. Home
  2. Cryptocurrencies
  3. Other

$15,000 For Your Crypto’s Ticket To Visibility

Crypto

Newer cryptocurrencies face a major handicap that tends to stunt their growth--poor visibility leading to low trade volumes.  But not to worry …  

There’s a cloak-and-dagger operation in town that can help them instantly inflate their volumes for a fair consideration and even get listed on prestigious platforms such as CoinMarketCap.

Meet Gotbit, a not-so-clandestine firm run by Russian undergrads that inflates trading volumes on obscure cryptocurrency exchanges. 

Market manipulation might be the bugaboo of the crypto industry; yet for 20-year-old Alexey Andryunin, it’s a business like any other. Andryunin, a sophomore at Moscow State University, is the co-founder of Gotbit, a firm that--for a fee--programs bots to trade tokens back and forth with each other thus creating the illusion of high activity aka wash trading.

You would probably imagine that a person like Andryunin running what is almost certainly an illegal operation would prefer to bask in obscurity. 

The fact that he has happily let blockchain firm CoinDesk into the inner workings of his firm without requesting anonymity, even bluntly admitting that what he does for a living is unethical and would not be condoned on traditional exchanges, says a lot about the industry’s level of regulatory scrutiny.

Inflating volumes

Gotbit is a two-man operation that was founded in 2018 and now boasts 30 token projects as clients. Andryunin, an Applied Maths major who says he hardly has time for classes, serves as the main marketer while his co-undergrad does the coding.

So, what can you expect to pay for your fledgling token to gain exposure?

Actually, their fees are quite reasonable. To get your coin accepted for listing on CoinMarketCap, it first has to be listed on two smaller exchanges. Gotbit charges $8,000 to list on small exchanges plus another $6,000 to support fake trading activity for a month. 

Andryunin rationalizes that his company offers a vital service because trade volumes on many of the smaller exchanges are so low that many would perish without artificially faking their volumes.

Related: Why Investors Shouldn't Ignore Gold Stocks

Then comes the big payday. Getting your coin eventually listed on CoinMarketCap is the ultimate goal and will set you back $15,000. Andryunin says most of their clients hit the 300-500 positions on CoinMarketCap--a standing start for a previously unknown token. CoinMarketCap currently has 2,356 cryptos listed on the platform.

Incredibly, these exchanges and even CoinMarketCap are fully aware of this illegal trading activity yet seem hardly bothered. Carylyne Chan, CoinMarketCap’s head of marketing, has unabashedly told CoinDesk:

“Our stance is to list as many crypto assets as possible, covering the universe of crypto assets over time. We are not in the business of censoring information.”

Andryunin has also mentioned Hong Kong’s BitForex and Shanghai’s Hotbit as some of the exchanges where wash trading is rampant. Neither responded to CoinDesk’s request for clarification.

Hit and run affair

So, how widespread is the practice? It appears that wash trading on crypto exchanges really is an epidemic. 

Alameda Research, a crypto trading firm, has analyzed order books of 48 exchanges worldwide and discovered that 14 of them, including BitForex, have near-zero genuine trading volume. For these platforms, nearly 100 percent of what is reported is the result of bot trading by Gotbit and probably other firms of its ilk.

It’s reports like these that lend credence to claims that only 5% of volumes reported on CoinMarketCap are genuine.

Yet, the biggest danger for investors is the revelation that only a miniscule amount of token owners have any intention of playing the long game. Indeed, Andryunin says it’s mostly a hit and run affair with only 2-3 of the 30 clients he is currently working with serious about creating any real value. The rest? They are simply looking to calm investors by giving some semblance of real demand then cash out--usually in a matter of months.

It’s a chilling revelation with a sobering reality. That’s why due diligence is always recommended when investing in this space.

By Alex Kimani for SafeHaven.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment