At a time when the New York Attorney General is raising questions on the integrity of cryptocurrency exchanges, suggesting a conflict of interest and market manipulation, OKEx is coming out strongly in opposition to these practices. In a recent blog post, the cryptocurrency exchange states in a Q&A format that it does engage in any kind of wash trading activities. However, they have now removed this blog post.
Daring to Do Different
OKEx wrote that daring is “OK” for innovation but “wash trading, faking volume and market manipulation, are not the ‘daring’ ones we would honor.” It further said that the exchange is doing its best to build an ideal blockchain ecosystem where integrity is the key. The exchange then went on to answer some FAQs about its trading volume.
OKEx denied its engagement in wash trading or volume faking of any kind, whether directly or indirectly. Wash trading is an activity through which a user simultaneously buys and sells the same instrument, giving an appearance that a real purchase and sale have been made. This leads to higher volume on the exchange but doesn’t lead to any change in user funds.
OKEx said that this kind of practice is “strictly prohibited” on the exchange. Any activity that undermines the objectivity and fairness of its trading markets will be not be allowed on the exchange, OKEx said.
The exchange also claims that it examines post-trade reports and monitors all live transactions to ensure that such trades don’t take place. If suspicious activities are traced, such as when a group of traders trades with each other at high frequency, the involved accounts will be banned.
Why Is OKEx Trading Volume Higher Than Its Website Traffic?
The exchange also covered the issue regarding the mismatch of its website traffic with its trading volume. OKEx called it a result of its market structure, which is different from that of its competitors. The exchange provides derivatives trading to users, providing up to 20x leverage, which could lead to higher trading volumes. It also said that derivatives trading is a good tool for institutional traders and professional traders who usually trade at a higher frequency, compared to average retail traders.
It went on to say that OKEx never traded with its users. According to the exchange, it only matches buyers and sellers. It added:
“This is the bottom line we will never cross.”
It reiterated that its 24/7 audit teams keep track of suspicious activities and take necessary actions.
Note: OKEx has removed the blog post on Medium. However, you can still access the cached version of the same by clicking here.
