Cryptocurrency trader Karthik Varma has recently accused popular Indian cryptocurrency exchange Bitbns of inflating trading volumes on its platform, presumably in a bid to attract users.
Varma, according to a post, found it strange Bitbns’ trading volumes dropped during the bear market for only a short period of time. Earlier this year, the exchange was accused of faking its trading volumes, but claimed a bug affected its systems.
Using the exchange’s APIs and a program he created using MySQL, Varma decided to investigate whether the exchange’s publicly displayed trading volumes matched its order books.
Claiming he “didn’t miss any data,” after running the program for 24 hours, Varma found Bitbns inflated its BTC and XRP trading volumes. He reportedly found that in 24 hours the exchange traded 62,365 XRP ($29,600) and 2.638 BTC ($17,180).
A screenshot he shared showed the exchange claimed to have traded 20.266 BTC and over 375,000 XRP in said period. His post reads:
BitBns is reporting a manipulated 24 hour holumes [sic]. It reported 501% more incase of XRP and 668% incase of BTC than the original volumes.
According to Varmas, the cryptocurrency exchange allegedly faked its trading volume in an attempt to grab traders’ attention, as markets with higher liquidity are more visible on data aggregator, and more attractive. Some traders, per his words, often check data aggregators before choosing a platform.
Curiously, although his research found the exchange was allegedly inflating its bitcoin and XRP trading volumes, its dash volumes added up. To Varma, the exchange didn’t need to inflate its DASH/INR pair as it had an ongoing trading contest.
This shows that Bitbns is still faking volume and also that they're doing this on purpose,they didn't fake DASH Volume as there's contest going on sponsored by @Dashpay
Sponsors like #Dash will believe Bitbns to be biggest exchange in India & sponsor more such competitions.(3/3)
— Crypto India News (@CryptoIndiaNews) October 5, 2018
Notably, Bitbns started standing out after offering former Zebpay users help by paying their transaction fees if they moved their funds to its platform. As CryptoGlobe covered, Zebpay was a prominent cryptocurrency exchange that was forced to shut down over a banking freeze.
Its downfall came shortly after India’s central bank, the Reserve Bank of India (RBI), issued a banking embargo on cryptocurrencies in April, which prohibits financial institutions from offering their services to crypto-related businesses. It had over 3 million users and 22 trading pairs on its platform.
At press time, Bitbns’ trading volume is of about $900,000 according to available data, with $431,000 coming from its XRP/INR trading pair. Reacting to the traders’ findings, the exchange’s CEO agreed to share data to confirm whether the code he used to obtain the data was flawed.